Zimbabwe’s cotton exports are projected to increase by up to 240 percent this year, on the back of anticipated solid performance by one of the key sectors primed to generate more foreign currency, according to the Reserve Bank of Zimbabwe.
This year, at least $85 million is expected from ginned cotton — also known as lint — from $25 million earned last year, the central bank governor, Dr John Mangudya has said.
This follows a sharp increase in raw cotton output after Government supported nearly 380 000 small scale farmers with inputs under the Presidential Cotton Inputs Scheme.
According to The Cotton Company of Zimbabwe, raw cotton deliveries has to date reached 122 000 tonnes and has exceeded targeted output by more than 20 percent.
The growth in cotton exports is in line with the RBZ’s thrust to boost foreign earnings through enhancing production and has-in the past few years-put in place various measures, among them incentives for exporters to stimulate production.
“We don’t have a currency problem but foreign currency shortage and this can only be addressed by increasing production,” Dr Mangudya said in an interview recently.
This year, cotton farmers were paid 10 percent export incentives of total earnings from their delivered crop. This was up from the 5 percent received from the previous season.
Cotton, once one of the country’s largest foreign currency earners, had lost glitter as farmers shunned the crop due to lack of funding and poor prices offered by producers. As a result of inadequate levels of inputs and agronomic support by cotton merchants, which led to low yields, side-marketing and poor debt recovery in the past few years, the industry almost collapsed.
Poor debt recoveries also resulted in the crop’s contractors perceiving high levels of risk and consequently cutting back on inputs financing. In 2015, output fell to 28 000 tonnes, the lowest since 1992.
But following initiatives such as the Presidential Cotton Inputs and the export incentive shemes, production has been on the increase. Cottco managing director Mr Pious Manamike said growth in cotton exports is on the back of increased output, thanks to Government’s inputs subsidies.
“The recovery is quite encouraging and we are expecting exports to significantly increase this year,” Mr Manamike told The Sunday Mail Business in a recent interview.
“What we now need is to sustain the recovery to ensure the country benefits immensely from cotton.”
Lands, Agriculture and Rural Resettlement Minister Perrance Shiri has already officially launched the inputs programme in various districts across the country, with distribution expected to start soon.
Minister Shiri said Government is committed to ensure farmers receive inputs on time to ensure adequate preparation. Previously, farmers would receive inputs late and this adversely affected production.
Under the Presidential Inputs Scheme, farmers receive a package of inputs including fertilisers, seed and chemicals.
The agricultural sector remains strategic to Zimbabwe’s economy. It sustains the livelihoods of thousands of households and has the potential to significantly generate foreign currency.
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