adminElita Chikwati Harare Bureau
Cotton hectarage is set to go down this farming season after local cotton companies cut financial support to farmers owing to a poor pricing system that has been triggered by China’s decision to offload its stocks on the international market. China had been holding on to about 10 million tonnes of lint cotton and decided to offload it. This resulted in the crop fetching low prices.
Most of the cotton sold by China is from the 2011 season.
As a result, local farmers and companies are feeling the pinch. Cargill has since closed down while Cottco which used to be the major contractor, is also having viability problems and cannot support farmers with inputs.
Cotton council spokesman, Garikayi Msika said cotton production is set to decline significantly, owing to these developments on the market.
“Cotton farmers will this season have to source own funding as companies who used to contract them have cut funding as a result of the poor prices on the international market.
“Cargill has already closed while Cottco is under judicial management making the situation worse for cotton farmers whose soils can’t support any other crop. People haven’t accessed contractual financing and we anticipate a small hectarage this season,” he said.
He said the few remaining companies were also complaining of viability issues.
Msika dismissed the issue of side-marketing as the reason why companies were pulling out of the cotton industry.
“China had huge stocks of cotton and now it has decided to offload so prices are going to be affected.
“The situation is bad, but it’s too early to talk of the hectarage as some farmers are still to procure inputs,’’ he said.
Msika also said the late onset of rains could affect the current crop.
The cotton industry has already been dogged by the issue of low pricing forcing some farmers to switch to tobacco which is fetching higher prices on the market.
Agricultural experts said local farmers produce small amounts of the crop and do not have any influence on the price as it is determined by large producers on the international market.
Online Reporter