Cottco Holdings Limited still owes farmers 800 million dollars; the company’s Acting Company Secretary Jacqueline Dube revealed in the Quarterly Trading Update for the third quarter ended 31 December 2021.
The company was buying cotton from farmers at US$1.30 in 2020.
Dube said, “Whilst Cottco was able to pay farmers ZWL3 billion from funding raised during the season the company is looking to unlock a further ZWL800 million to clear outstanding dues to farmers the payment of the outstanding 2020 subsidy by government.”
“In order to ensure that cotton farming remains viable, government generaously committed an additional ZWL22 per kg delivered by farmers as a subsidy payment. The total subsidy for 2021 is ZWL2,53 billion and ZWL500 million was released and paid to farmers during the period under review.”
Besides late payment to farmers, Cottco has also faced challenges due to power availability, late onset of rains, and COVID-19.
Dube says the late onset of rains has resulted in a sizeable crop being established 1-2 months later than normal and this could affect the maturity and fibre length of the cotton output.
“Cottco’s ginning schedule was delayed by power availability and 93% of the seed cotton intake had been ginned by the 31st of December 2021 with production now set to end in January 2022,” she said.
“The business experienced some disruptions due to an increase in Covid-19 cases at the end of the quarter although the impact was minimised through remote working.”
Despite challenges, Cottco’s final intake for the third quarter of 2021 stood at 116,052 MT compared to 82,479MT in 2020.
“Zimbabwean hand-picked cotton is in high demand and the company’s order book exceeds production volumes.”
