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Sunday, February 25, 2024
HomeBusinessCottco Optimistic Of Successful Cotton Farming Season Despite El Nino Setback

Cottco Optimistic Of Successful Cotton Farming Season Despite El Nino Setback

Emirates

All necessary groundwork for the smooth flow of the cotton farming season across the country has been adequately laid to ensure maximum production is realized despite the adverse effects of the El Nino phenomenon that resulted in the late onset of rainfall, 263Chat-Business has established.
The Cotton company of Zimbabwe (COTTCO) contracted 182 000 farmers who have established the crop on 128 000 hectares in all cotton growing areas.
To avert past bottlenecks in the distribution of inputs, Cottco, Grain Marketing Board (GMB) and AGRITEX have heightened collaborative efforts by setting up robust measures to enable farmers to easily access extension services and the second tranche of inputs which include chemicals and top dressing.
Renowned farmers who established the crop on 2 hectares and above during the 2023 cotton farming season have been ring fenced and availed with adequate inputs and all the necessary support to ensure maximum production is realized.
Further, Cotton Inputs Distribution Points and Virtual depots have been established to expedite the movement of herbicides and insecticides.
“Since the beginning of the year, countrywide consultations have been held in collaboration with all parties involved in the distribution process and farmers’ unions to provide clarity on the issue,” said Cottco.
“Focus is also on preparations for the 2024 marketing season to ensure farmers are paid on time and side marketing is curbed.”
In its 5-month trading update to 31 January 2024, Cottco said it is further buoyed by firming international lint prices that will boost earnings for local growers.
“International lint prices rebounded from a low of US74.85c/lb at the beginning of November 2023 to current levels of US85c/lb on the back of increased demand with top cotton consumer China accounting for more than half of the net sales,” said Cottco.
Furthermore, the company said oilseed prices remained firm during the period while affirming that locally, the demand for ginned seed from oil expressors continued to surpass the available supplies.
All this is expected to improve Cottco profitability and subsequently build its capacity to timeously pay cotton growers.
However, due to the effect of the El Nino conditions, the company said the first effective rains were received a bit late resulting in the 181,604 growers so far establishing an estimated 128,152 hectares down from 250 000 hectares last year.
Nevertheless, the Company is projecting to break even for the year ended 31 March 2024 in USD terms.
“This comes on the back of improved cost management through the measures highlighted in the Company’s last trading update,” the company said.
According to Cottco’s latest figures, the final intake figures for the 2023 Cotton Buying Season stood at 69,419mt which was a 48% increase from the 46,748 metric tonnes achieved in 2022.
However, erratic power supplies in the last quarter of 2023 delayed the completion of ginning. To date 58,326mt (84%) of seed cotton has been ginned with only 1,066mt (2%) having been toll ginned in the Lowveld due to the high volumes in that area.
Local and offshore lint customer collections are still underway with 7,776mt of lint in stock. Ginned seed on hand is 4,642mt and upliftment by seed suppliers and oil expressors is underway with 475mt of lint having been converted to yarn since 1 April 2023 to date.
The Company was however able to settle US$19.6million (83%) and ZW$7.2billion (18%) of the farmer payments dues in the respective currencies with outstanding dues expected to be cleared from product receipts by 31 March 2024.

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