By Elita Chikwati Agriculture Reporter
Cotton producers could be in for another bad season if China continues to offload 10 million tonnes of cotton lint in its stocks onto the international market. Already farmers have been selling their crop at heavily discounted prices as ginners refused to negotiate on prices with farmer organisations.
The highest price being offered for seed cotton is 40 cents per kilogramme while last season prices went as high as 75 cents per kg.
Zimbabwe Farmers Union weekly guide shows that cotton prices started falling after the Chinese government announced its intention to start selling its cotton stocks.
“Cotton prices tumbled 14 percent after the Chinese government announced that it intended to start selling cotton from its 10-million tonnes stock,” read the guide.
Most of the cotton being sold by China is from the 2011 season.
“Cotton producers could be in for another wild ride in 2014 as the Chinese government continues to reduce its stockpile. It also plans to announce new policies in the spring for the 2014/2015 growing season,” the weekly guide stated.
Some agriculture economists believe that the Chinese government will refrain from continuing to dump` its reserves on the market for fear of undercutting the value of its reserve and hurting its domestic producers.
Cotton council spokesman Garikayi Msika said the move by China could be disastrous if it coincides with the local cotton marketing season.
If they sell the whole consignment now, it will greatly affect us considering that they are selling lint (processed cotton).
Msika said if China does not sell the whole consignment there will not be any great change on the international market.
“Local ginners are taking advantage of the Price Tariff Commission that declared that farmers negotiate for higher prices with ginners individually. The same companies are offering high prices to cotton farmers in Malawi whose production costs are far way below ours,” he said.
Farmer organisations’ leaders feel that their members do not have the capacity to negotiate with ginners.
Meanwhile, there is speculation that cotton prices will be strengthened by a decline in the United States cotton production this year.
Some US farmers decided to cut on cotton production and increase corn production which offered high prices. – The Herald.