‘30% lint reserved for local players’
BUSINESS REPORTER
Zimbabwe has stuck to the policy of reserving 30% of the lint to support local industry despite pressure from other quarters to abandon the policy.
Latest figures from the Agricultural Marketing Authority (AMA) show that domestic lint consumption stood at 6 893 metric tonnes (mt) out of the 22 978mt produced with the remainder destined for exports in the 2021/22 season.
The reservation of 30% for local consumption has been in place in all but one of the past five seasons since 2017/18.
It is understood that the local industry does not take up the reserve lint in some instances, forcing cotton contractors to seek approval from AMA to export the lint. Cotton contractors require approval from agricultural regulatory body, AMA to export the lint.
In 2022, 11 companies owned 21 ginneries with a total ginning capacity of 599,600mt of seed cotton. However, only 15 of the ginneries were operational, according to AMA.
Cottco is the largest ginner with six ginneries and accounts for 27.52% of total ginning capacity, second largest ginneries are owned by AVC which take up 22.71% and the third largest ginning capacity is owned by China Africa which takes up 11.67%. The balance of the capacity of ginneries is owned by eight other ginneries.
The average ginning outturn in Zimbabwe is about 41%.
“Cottco met the bulk of the domestic lint requirements during the 2021/22 marketing season. Exports are mainly to Europe, Asia, and Far East countries,” the AMA report read in part.
