Cottco has registered a massive gain in its cotton intake in the current 2021 cotton buying season, as it currently has taken delivery of 114,656MT and anticipates more deliveries. The current intake is 32,177MT more than the total of 82,479MT received in the whole season of 2020.
With the country anticipating a total of 130,000MT of cotton, the current intake gives Cottco a market share of approximately 88 percent, the cotton buyer said in its second quarter update. The market share however, is down 2% from 2020 levels due to an increase in side-marketing which was caused by a shortage of wool packs.
After being rocked by late payments last season, which saw the cotton processor paying for deliveries with groceries, it claims to have extinguished the debt except for members that delayed availing their banking details.
“A significant portion of the outstanding farmer payments for 2020 have been cleared, with the final payments, of farmers who had not initially submitted banking details, expected to be cleared timeously,” read the statement.
In relation to the government subsidy, Cottco expects funding of the 2021 subsidy of ZWL22 per kg to be released any time soon as farmers head back to the fields.
As for the financial performance, the company said, it is publishing quarterly trading updates pending the imminent finalisation of the outstanding external audits.
On the world market, lint prices have continued to be bullish with the basis price surpassing 100c/lb, compared to last year’s average price of US56c/lb. However, the rising costs of local cotton production continue to put pressure on the company’s margins due to the various exchange rates prevalent on the market which are being used by some suppliers as a basis for costing.
Commenting on the recent fire incident in Checheche in Chipinge, the cotton processor said US$2.5million worth of lint was destroyed and investigations on the cause of fire are being investigated, although the cotton was insured – Harare