Zimbabwe’s cotton productivity capacity has deteriorated to unprecedented levels

ZIMBABWE’s cotton sector is experiencing viability challenges as production has declined, with the area dedicated to cotton slumping from 300 000 hectares in the 2011/2012 season to 110 000 hectares during the 2015/2016 agricultural year.
At peak production in 2012, small scale farmers produced 660 million bales (350 703 tonnes) of cotton which translated to 143 788 tonnes of lint and earned the country over US$200 million.
A report titled Review of the Cotton Industry in Zimbabwe by the Zimbabwe National Farmers Union (ZNFU), said Zimbabwe has the capacity to contribute towards global cotton stocks despite the deteriorating production.
“The scope of production has deteriorated to unprecedented levels in Zimbabwe. Stakeholders have now and again developed strategies to reduce the impact of challenges the industry faces from time to time.
“Analysis of local and international trends especially in research and development, growing,   marketing, value addition and exporting processes of cotton has given rise to the need to review the sector in Zimbabwe’s context. Political and socio-economic considerations also play a significant role in the growth or demise of the sector,” said ZNFU production and logistics director, Daniel Madungwe, in the report.
Farmers and ginners are currently engaged in operational and legal battles regarding the   supply of adequate inputs, side marketing, grading and pricing, but according to ZNFU the sector needs to develop a strategy that ensures the survival of the industry.
“The government and sector stakeholders have been developing measures to bring sanity and viability in the industry. However, it is imperative to continue reviewing the cotton sector from local and international perspective so as to transform and survive as an industry and nation,” Madungwe said.
International trends show that China has emerged as the largest cotton importer, taking over 36 percent of world imports.
The Chinese government has been stockpiling its cotton imports as well as surplus from its farmers into a large national cotton reserve, which has affected current global prices.
International prices as per Cotlook ‘A’ Index are currently averaging around US$0,65 per pound  (US$ 1,43/kg). The Chinese government has indicated that it is likely to buy (import) limited quantities to replenish its reserves.
China will be focusing on good quality cotton offering US$0,83 per pound (US$1,82/kg).
Already the market is skewed towards the developed nations who offer their farmers subsidies of about US$2 billion per annum through minimum support prices, import quota systems as well as maintaining local cotton prices above international prices.
“Farmers and ginners will soon be engaged in price negotiations on a commodity which has its price set by China at US$0,65 per pound. Where does this leave the farmer?” Madungwe asked.
The destination of cotton exports has shifted from Europe to Asia, mainly China, Bangladesh, Indonesia, Vietnam and India.
Prior to 2000, the buying of seed cotton remained orderly in Zimbabwe due to limited buyers and processors.
However, this changed when a proliferation of buyers entered the industry to purchase seed cotton for speculative purposes (to buy cotton in Zimbabwe dollars  and export lint in US dollars to acquire foreign currency).
Resultantly, the systematic buying of seed cotton by farmers became dysfunctional.
“Credit schemes and quality control of cotton fell by the way side and the national cotton production and exports declined.”
The report recommended that cotton be classified as a national asset, like land and other natural resources, where its production and marketing is driven by personal interests and national goals.
“The development of the cotton sector needs a paradigm shift. It cannot be business as usual because viable cotton markets need to be developed constantly,” Madungwe added.