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Zimbabwean ginners defend AMA over cotton prices
26 May '12
2 min read
The Zimbabwe Cotton Ginners Association (CGA) has defended the Agricultural Marketing Authority (AMA) over the recommended cotton price to be paid to farmers in the new cotton season.
The AMA has recommended US$ 0.36 per kg to US$ 0.50 per kg price range for Grade D to Grade A cotton to be paid to local producers in the just started cotton season. However, the new prices have been rejected by farmers.
The CGA said Malawi has fixed seed cotton prices at 78 Malawi Kwacha per kg (US$ 0.32 per kg), while Mozambique has fixed base rate at 10.5 Meticals per kg (US$ 0.37 per kg) for Grade A cotton and eight Meticals per kg (US$ 0.28 per kg) for Grade D cotton.
CGA Director-General Godfrey Buka said the cotton prices have been arrived at by taking three factors into consideration, viz. the cost of production for farmers, the cost of production for ginners and the likely international cotton prices when it is sold.
Mr. Buka said Zimbabwe on average produces a mere 100,000 tons of cotton, compared to around 28 million tons of cotton produced globally. Hence, Zimbabwe cotton production is not in a position to influence international prices.
Thus, in reality, the price paid to Zimbabwean farmers is largely influenced by the price at which Zimbabwean cotton is sold in world market. The domestic textile industry consumes less than three percent of the total cotton produced in Zimbabwe, he added.
The CGA said the global cotton prices are currently heading downwards and hence the ginners would end up making loss if they procure cotton from farmers at higher prices.
The AMA has recommended US$ 0.36 per kg to US$ 0.50 per kg price range for Grade D to Grade A cotton to be paid to local producers in the just started cotton season. However, the new prices have been rejected by farmers.
The CGA said Malawi has fixed seed cotton prices at 78 Malawi Kwacha per kg (US$ 0.32 per kg), while Mozambique has fixed base rate at 10.5 Meticals per kg (US$ 0.37 per kg) for Grade A cotton and eight Meticals per kg (US$ 0.28 per kg) for Grade D cotton.
CGA Director-General Godfrey Buka said the cotton prices have been arrived at by taking three factors into consideration, viz. the cost of production for farmers, the cost of production for ginners and the likely international cotton prices when it is sold.
Mr. Buka said Zimbabwe on average produces a mere 100,000 tons of cotton, compared to around 28 million tons of cotton produced globally. Hence, Zimbabwe cotton production is not in a position to influence international prices.
Thus, in reality, the price paid to Zimbabwean farmers is largely influenced by the price at which Zimbabwean cotton is sold in world market. The domestic textile industry consumes less than three percent of the total cotton produced in Zimbabwe, he added.
The CGA said the global cotton prices are currently heading downwards and hence the ginners would end up making loss if they procure cotton from farmers at higher prices.
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