Govt finalising cotton price structure

Source: Govt finalising cotton price structure | The Herald June 28, 2017

Livingstone Marufu Business Reporter
GOVERNMENT says it is now finalising the new prices for different grades of cotton ahead of the beginning of the selling season.

Agriculture, Mechanisation and Irrigation Development Minister Joseph Made said finalisation of the prices would be done in consultation with the Ministry of Finance and the Reserve Bank of Zimbabwe.

“We expect Grade A cotton to fetch over 50 cents per kilogramme. The price, which Government will gazette must be paid fully to the farmer. Grade A cotton will fetch the highest, while (Grade) B will be the second highest.”

Long before the start of the selling season, Government had already proposed to buy the highest grades of cotton at 55c per kg, while the base price had been pegged at 40c, with 15c being a subsidy.

“Over 60 percent (72 000t) of the total output is expected to be Grade A; which is the supreme grade in cotton production. This year we have had an excellent season and we expect that to continue every year in all areas, with cotton included,” said Dr Made.

Stiff penalties had been set against farmers and companies caught side marketing the largely Government-funded cotton. “Remember, they received inputs for free and will only make a profit. Cottco will not be allowed to stagger payments to cotton farmers,” he said.

Government has projected cotton output to reach 120 000 metric tonnes this year from 35 000 metric tonnes last year on the back of support rendered through the Presidential input support programme.

Cotton production had declined to about 35 000 tonnes by 2016, from an average of 84 000 tonnes in 2015 and 143 000 tonnes in 2014. Dr Made said the Agriculture Marketing Authority and Cottco should establish more buying points, as no farmer would be allowed to transport their cotton for more than five kilometres to the nearest buying point.

Most farmers had abandoned cotton production over the past few seasons in frustration over perennial poor prices offered by merchants, which in instances were as low as 30 cents per kilogramme.

Government intends to double the cotton hectarage, which it will support through Cottco next season with tentative estimates at 300 000 ha.