Zimbabwe cotton output on the verge of collapse

Zimbabwe cotton also known as the white gold had economically uplifted places such as the hot and semi-arid marginalized areas like Gokwe in the Midlands Province. Besides bringing in the much needed foreign currency, the textile, oil-pressing and stock feed industries also benefitted from cotton production in Zimbabwe. But today, the nation cannot talk of a 2015 cotton crop because there is no cotton crop to talk about.

The 2015 cotton crop is too small that experts in the industry believe that it would be smaller than the 2012/2013 crop which was 145 000 tonnes. This is despite, the country having capacity to produce over 350 000 tonnes.

Zimbabwe has fallen from number 27 and landed out of the 192 world cotton producer rankings. The challenges that have bedeviled the sector for over a decade have finally seen the collapse of the sector. Zimbabwe stands to lose over US$250 million revenue annually in cotton exports.

The Cotton Company of Zimbabwe (Cottco), largely responsible for rural development especially in Gokwe, is now under judicial management with thousands of farmers left stranded without any input support in the 2014/2015 farming season.

Cotton contributed sustainably to rural incomes, rural developments, employment and export earnings. It was the mainstay of rural communities, resulting in the development of areas like Gokwe, Sanyati, Rushinga, Checheche, Muzarabani, Matepatepa in Bindura and Muzarabani. The sector was a major source of livelihood for over one million people, including farmers, farm workers and the textile industry as it once contributed about 19 percent of the country’s agricultural export earnings.

However, the 2014/2015 cropping season progress indicates that the sector is in serious trouble because many farmers failed to access adequate inputs from contractors while other contractors such as Cottco and Cargill have closed shop.

Farmers decried the closure of these companies, arguing that the Chinese merchants were untrustworthy and were not interested in the development of the communities. Farmers are accusing the Chinese of being only interested in profit-making unlike other players not linked to China.
The loss of cotton profits has destroyed livelihoods in rural and often impoverished villages of the country, where peoples’ existence is intricately linked to the growing of the fibre.

The Zimbabwe Farmers Union (ZFU), reports that for the 2015 season, cotton farmers failed to go back to the fields arguing that the contractors had reduced farmers to mere labourers since it was no longer viable to continue producing the cash crop.

The cost of production is too high in Zimbabwe compared to other countries, while the depressed international prices have also contributed to the decline in the number of farmers producing cotton, said ZFU president Abdul Nyathi.

Farmers have abandoned cotton production due to distortion in the producer price which have had a negative effect on production. Statistics from the Cotton Ginners Association show that in 2008/09 season the cotton average price per kilogramme was US$28, in 2009/10 it was US$0,37, while the 2010/2011 season it was a good year for cotton farmers with ginners buying at an average price of US$0,91 per kilogramme. However, the following year prices tumbled to US$0,37 per kg. In 2012/2013, merchants were buying at US$0,50 and last year the average price was US$0,60 per kg.

Prices this year are expected to decline further as China releases its cotton stockpile on the market and already the Cotlook A Index quoted a depressing price of US$0,71 per pound.

Over the years, the success of cotton profitability has been undermined by depressed and volatile world market cotton prices, partly as a result of uncurbed United States subsidies, and the ongoing downward trend of commodity prices

As a result, production has declined and contractors have scaled down funding for cotton production due to rampant side-marketing by farmers with contractors losing out to fly-by night buyers who entice contracted cotton farmers with better prices.

According to Zimbabwe National Farmers Union vice-president, Garikai Msikam the production for the 2014/2015 season would decline owing to a number of challenges. One of the challenge faced is with China having released its stockpile, globally, the prices will be depressed and it will affect production in Zimbabwe. Also the season is not looking good because the contractors have not provide the farmers with adequate necessary inputs as they played a wait and see game, relying on the Presidential Input Scheme to distribute inputs to the farmers.