Cotton Company of Zimbabwe (Cottco) is anticipating a 82% increase in cotton intake to 150 000 metric tonnes(MT) by year-end following improved rainfall and inputs distribution.
Last year, cotton intake was 82 479 MT.
In a trading update, the first published financials since 2016, Jacqueline Dube , the company secretary for Cottco, which is suspended from trading its shares on the Zimbabwe Stock Exchange, said the company was anticipating a bumper cotton intake by year-end.
”Rainfall in the current agronomic season improved and delivery of inputs to farmers also improved for the season under review. As a result, the company is targeting an intake of 150 000MT as compared to 82 479MT achieved in 2020.” Dube said.
Dube said Cottco, achieved a 38% increase of cotton intake to 56 681mt in the quarter to June 30,2021.
The company’s order book in the period under review was also full for both lint and ginned seed and the company is forecasting to export 76% of its lint.
Lint prices had collapsed last year to a low of US$56c/lb during the Covid pandemic have in 2021 firmed to levels of around US88c/lb on the back of
increased demand and low world stocks.
In a development that is expected to boost production, government has committed to clear the 2020 outstanding subsidy balances for farmers who grew cotton under the Presidential Input Scheme therefore a plan has been agreed with the government for the 2021 support price which will ensure that farmers attain a viable price and continue to grow cotton in the forthcoming seasons.
The company’s also improved its cost containment activities and operational efficiencies so that that the company does not incur a loss for the financial year ended 31 March 2022 Dube said.
In order to improve farmer viability and grow volume the company is banking on high yielding seed varieties they have been experimenting with over the past two seasons
”Cottco has over the past two seasons been testing a high-yielding variety whose output is more than double the yield per hectare even under extreme weather conditions. The company intends to roll-out the high-yielding varieties on a larger scale in the forthcoming seasons” Dube said.
A new board for Cottco was recently appointed. Its chaired by industrialist Sifelani Jabangwe.
Jabangwe is deputised by financial management expert Onai Muvingi, while Cynthia Tapera, Ezekia Svotwa, Mildred Mushunje, Mavis Marongwe, Pious Manamike and Medlinah Magwenzi make up the rest of the board.
The board is spearheading the turning around of the firm into a viable commercial entity that does not relentlessly rely on the Presidential Inputs Scheme.
Since 2015, Cottco has been administering the Presidential Inputs Scheme but has been losing a significant amount of cotton to private players due to side marketing.
Cotton, once one of the country’s largest foreign currency earners, had lost glitter as farmers shunned the crop due to lack of funding and poor prices offered by producers.
As a result of inadequate levels of inputs and agronomic support by cotton merchants, which led to low yields, side-marketing, and poor debt recovery in the past few years, the industry almost collapsed but thanks to the Presidential Input Scheme production has been on the rise.