Cotton deliveries 43% lower than target as selling season nears end

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  • 114,656 metric tons of cotton delivered so far
  • Side-marketing contributed 2% loss of COTTCO’s market share
  • Lint prices up

Harare – Cotton deliveries to COTTCO reached 114,656 metric tons(mt) as of the second quarter ended 30 September 2021, surpassing 2020’s full year’s output of 82,479mt as the 2021 cotton buying season draws to a close.

This is however 43% lower than the 200 000mt target set by The Cotton Producers and Marketers Association midst cases of side-marketing which authorities have consulted legal channels to put an end to.

Zimbabwe’s cotton season runs in two phases: production and marketing between October and April and May and September respectively.

“National seed cotton production is estimated to be 130,000MT meaning COTTCOs market share is approximately 88%,” COTTCO said in a trading update.

Meanwhile, lint prices have continued to be bullish after it went up almost 50%, with the basis price surpassing 100c/lb, compared to last year’s average price of US56c/lb.

“The rising costs of local cotton production continue to put pressure on the company’s margins due to the various exchange rates prevalent on the market which are being used by some suppliers as a basis for costing,” the group said.

Experts are predicting average to above average rainfall for the 2021/2022 cotton farming season with a significant number of farmers expected to adopt precision agriculture under the Cotton Pfumvudza/Intwasa program.

“This approach promotes focusing on provision of adequate plant nutrition and thus the farmers are expected to achieve higher yields,” the group added.

This method is expected to result in further growth of cotton volumes and improvement in returns for both COTTCO and the farmers during the next season.

The company however, suffered a huge blow in early October after US$2.5million worth of lint was destroyed after a fire broke out at a site where some of the cotton was being toll-ginned in Checheche in Chipinge South.

 The company is publishing quarterly trading updates pending the imminent finalisation of the outstanding external audits.

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