- October 20, 2017
- Posted by: dev79
- Category: Business
RESERVE Bank of Zimbabwe governor Dr John Mangudya said The Cotton Company of Zimbabwe has mobilised enough resources to buy cotton during this marketing season.
The Government, through the RBZ spent at least $40 million to finance cotton this season and Dr Mangudya assured farmers that they would be enough money to buy their crop.
The central bank governor also said purchases below $200 would be paid in cash. The Government, through the RBZ’s Zimbabwe Asset Management Company took over the majority stake of Cottco after paying off its debts amounting to $38 million. “Cotton, like tobacco, is supposed to be purchased using foreign exchange from offshore facilities drawn down by cotton lint merchants or buyers,” said Dr Mangudya.
“Cottco has already arranged foreign exchange facilities with five international buyers of cotton lint and are starting to buy seed cotton from farmers this coming Monday.
“We agreed that cotton purchases of below $200 shall be paid in cash and that farmers should have accounts, mobile banking, bank accounts or plastic money so that farmers could benefit from quality top up payouts after seed cotton grading and for promoting financial inclusion under the Cotton Input Scheme.”
Some private cotton companies have been misleading farmers in some major cotton areas, claiming Cottco did not have money to buy the crop in a bid to entice them into side marketing.
In an interview, Cottco managing director Mr Pious Manamike said on Friday the funds secured would be enough to purchase the crop financed by the Government. “I can confirm that we have secured facilities for the intake,” he said. “I can assure farmers that they would be enough money to buy the crop contracted by Government.”
About 100 000 tonnes of cotton are expected this year up from 30 00 tonnes farmers produced last year, the lowest output in more than two decades. The Agricultural and Marketing Authority is already issuing the buyers’ licenses. In a statement, AMA confirmed that the selling season had opened, urging buyers to buy “only from areas they financed and from farmers they supported.”
“The cotton marketing season has started and AMA has deployed common buying point clerks this week,” said AMA, which is mandated to ensure orderly marketing of the crop.
In anticipation of a bumper harvest, Cottco has overhauled its ginneries to increase capacity utilisation. “Our ginneries have been overhauled and they are ready for test runs,” said Mr Manamike.
“We have six ginneries and they will all be running. All the six ginneries have a combined ginning capacity of 130 000 tonnes per year. As we run all the ginneries on three shifts we will employ an additional 660 ginnery staff to man the additional four ginneries that are coming on stream. Last year we ran two ginneries only.”
The cotton sector, which supports about 400 000 households had virtually collapsed with production declining to record low at 30 000 tonnes last season, the lowest since 1992.
This season, the Government came up with a $50 million inputs package.