Low rains hamper cotton volumes

COTTCO Holdings Limited says erratic rainfall caused by the El Niño phenomenon will reduce yields compared to volumes of the seed taken up by farmers this year.

BY VICTORIA MTOMBA

This comes on the back of declining national crop yield to 100 000 tonnes in the 2014/15 season from 135 000 in the 2013/14 season.

“The late start of the planting season due to erratic rainfall caused by the El Niño phenomenon is likely to reduce yields compared to the volumes of the seed taken up by the farmers,” Cottco board chairperson Cecilia Paradza said in a statement accompanying the group’s financial results for the half-year ended September 30, 2015.

The projected decline in yields also comes as government has donated free inputs to farmers to boost cotton production.

In his 2016 national budget statement, Finance minister Patrick Chinamasa said farmers would receive free inputs for the next three seasons to improve production and yields.

In his 2016 National Budget, Finance minister Patrick Chinamasa said a number of policies to mobilise Diaspora remittances as an important source of liquidity in the economy have been instituted.

Paradza said government’s free inputs scheme has seen 4 156 tonnes of seed being disbursed to farmers translating to 245 000 hectares. Cottco distributed 835 tonnes to farmers. Paradza said the combined government-Cottco programme covers 300 792 hectares.

Paradza said the global lint prices continued to be bearish as global production and stocks on hand exceed demand.

Revenue for the group was down $2,3 million during the period from $17,8 million in September 2014 due to the delay in the start of the ginning and sales offtake in the industry. The group expects sales figures for the full year to be lower than the comparable period in 2014 due to a 33% decline in volumes and lower lint prices.

In the period under review, Cottco narrowed its loss to $8,1 million from $10 million.

Borrowings for the group were 7% lower than the prior period at $54 million.

Paradza said government had begun the process of rescuing Cottco by taking over its debts through the Zimbabwe Asset Management Company.

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