Cotton buyers, farmers haggle over prices
http://www.theindependent.co.zw/
Thursday, 23 June 2011 19:43
COTTON buyers and farmers are at loggerheads over prices producers feel are
too low, businessdigest has established.
A union representing farmers, the Zimbabwe Farmers Union (ZFU) is already
urging farmers to hold onto their crop until buyers pay more or come up with
plausible reasons why prices have come down.
In an interview with the businessdigest, the Vice President of Zimbabwe
Farmers Union, Mr Berean Mukwembe, said prices in the region are quite
competitive as compared to 70 US cents which is being offered in Zimbabwe.
“I was in South Africa recently, they are paying close to 1, 80 US cents per
kg and Malawi 120 US cents per kg, so farmers in Zimbabwe have to be paid
more because our cotton is even better than the genetically modified cotton
of South Africa,” he said.
However, an authoritative source among the buyers said the complainants were
farmers with little produce and those who had never experienced a situation
where prices go down.
Prices in Zimbabwe are likely to rise owing to firm demand on the
international market, he said.
Cotton lint prices as depicted on the Cotlook A Index (International Cotton
Industry weekly newsletter) have surged from 78 US cents per pound last year
to 140 US cents per pound in the current year.
Cotton Ginners’ Association chairman David Machingaidze said: “Preliminary
indications show that the national hectarage could be around 450 000
hectares that surpasses the previous seasons which had 350 000 hectares
which produced a crop size of 268 000 tonnes.”
“This year’s global lint production was not adequate to keep pace with
global consumption, largely due to inclement weather in some of the world’s
top producing countries, such as Pakistan, Bangladesh, India and China,” he
said.
In his 2011 national budget presentation, Finance minister Tendai Biti said
cotton output is estimated to reach 260 000 tonnes in 2010, from 211 000
tonnes in 2009.
The promulgation of Statutory Instrument 142 of 2010, which protects both
cotton farmers and cotton buyers through prohibiting side marketing, has
built confidence in the sector.
As a result, contractors who had withdrawn from the sector in 2009 returned,
increasing the number of supported farmers. In 2011, cotton production is
projected to further increase to 300 000 tonnes.
The International Cotton Advisory Committee, a body comprising the world’s
cotton producing countries, has projected a seasonal average price of 156 US
cents per pound of processed lint. — Staff Writer.
“It was also mentioned that the major stumbling block to opening more
auction floors, especially outside Harare, would be the IT system to upload
and download information. Sales cannot start until all floors have uploaded
their data. There was a possibility of not getting buyers at remote auction
floors. An opportunity for arbitrage could exist. It was mentioned that
with the current three auction floors, as a micro-industry, were currently
poaching manpower from each other,” read the minutes.
Experts also attribute congestion at the floors to a sharp increase in small
scale farmers. Official statistics indicate that small scale farmers had
grown to 52 000 last year from 1 500 at the start of the controversial land
reform exercise.