Cottco suffers huge losses as cotton is exposed to rain

23 Jan, 2024 - 00:01 0 Views
Cottco suffers huge losses as cotton is exposed to rain Cotton growing on a steady increase in Zimbabwe

eBusiness Weekly

Business Writer

Cottco, the country’s largest cotton financier is facing a major loss after significant amounts of raw cotton were exposed to rains, company sources have said.

The board’s decision to forego contracting private ginners under toll ginning agreements has backfired, as the company subsequently struggled to process the entire cotton crop from the previous intake season before the rains, the sources said.

Despite owning five ginneries in Muzarabani, Chiredzi, Kadoma, Chinhoyi and Gokwe, operational shortcomings prevented Cottco from processing all the crop from 2023 harvest.

A Cottco senior official, speaking on condition of anonymity due to company policy, acknowledged the inevitable loss while assuring efforts to minimise it: “We have taken steps to protect the cotton, but some loss is unavoidable,” said the official.

Cottco previously relied on private ginners, but the board chose to handle all the ginning internally in a bid to reduce the costs and eliminate opportunities for corruption.

While the board’s decision to manage ginning internally aimed to improve efficiency, the lack of supporting measures for maintenance, staffing, and optimisation across all five facilities contributed to the processing backlog, the official added.

“There were no corresponding measures to ensure all the ginneries operate efficiently.”

Following a muted uptake of the inputs this cropping season, last week, Cottco launched a nationwide campaign urging farmers to capitalise on the rains for cotton planting.

While planting figures remain unavailable, sources have indicated concerns over recurring late payments and recent changes to input distribution contributed to low uptake.

While Cottco’s decentralised network previously minimised travel distances for farmers, input distribution has been transferred to Grain Marketing Board depots, posing some logistical challenges for cotton growers mostly in the countryside.

“We understand the need to combat corruption in the inputs distribution process but this new system is not working for us,” said a farmer in Muzarabani. “We are urging Cottco and Government to reconsider and find a way to bring back the accessibility and convenience of their previous network.” The farmers added.

The State-funded Presidential Free Cotton Inputs Scheme, administered by Cottco, aims to boost cotton production by providing seed, fertiliser, chemicals, and tillage services to farmers in drought-prone areas, ultimately enhancing their livelihoods.

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