HARARE - Cotton growers have ignored the government stipulated producer price because of stiff competition in the market, it has been learnt. (Pictured: Cotton pickers in Zimbabwe)
Following complaints by farmers, the government announced cotton producer prices of US$0, 35 a kg for the lowest grade and $0.50 for the highest grade, but buyers ignored the prices and continued buying at $0.30 a kg. Only one company, Sino-Zimbabwe Cotton Holdings, has been buying cotton at higher prices. However, other cotton buyers under the Cotton Ginners Association of Zimbabwe alleged the company was buying the crop from farmers contracted by its members and was able to offer higher prices because it not assist with inputs.
The Cotton Producers and Marketers Association secretary general Daniel Madungwe said that for the past two weeks, ginners had been buying cotton at a higher price because of competition. He said the crop was now fetching between US$0.50 a kg and US$0.65 kg. “The cotton buyers increased their price a fortnight ago and now most of them are buying cotton at prices ranging between US$0, 50 a kg and US$0, 65 a kg. The increase in their prices is because of competition among themselves to mop up all the cotton that farmers have been withholding this marketing season because of unfavourable producer price which they offered,” he said.
In the past, farmers have cried foul over unfavourable producer prices, resulting in most of them withholding their crop. As a result of farmers refusing to sell their cotton, textile companies’ operations had also been affected negatively because such firms depended on the supply of cotton by ginning companies. Madungwe said as a result of better cotton producer price presently prevailing on the market, farmers had started selling their produce to buyers.
Post published in: Economy