Cotton farmers in Zimbabwe are expected to benefit from the anticipated world demand as the development is set to boost the current cotton prices, Zimbabwe Farmers’ Union second vice-president Berean Mukwende has said.
BY TARISAI MANDIZHA
World consumption of cotton is expected to increase by 5% to 24,5 million tonnes in 2014 to 2015, according to the International Cotton Advisory Committee (Icac) as polyester and cotton prices converge.
In an interview with Standardbusiness, Mukwende said the increase in world consumption of cotton would revive the industry in Zimbabwe.
“Obviously, if demand increases the price of cotton will go up and it also means farmers are going to benefit,” Mukwende said.
He said cotton prices of cotton currently ranged between US$0,50 to US$0,80 cents per kg and if the demand for cotton worldwide continued to grow, production would increase and this would boost the economy.
Mukwende however said there was need to introduce better technology to improve yields and the varieties as current yields were very low when compared to other countries.
Icac is an association of governments of cotton producing, consuming and trading countries.
It said after international cotton prices spiked in 2010/11, many spinners decreased the share of cotton in yarn in favour of greater use of polyester. At the start of 2013, the gap between cotton and polyester prices widened.
“Polyester prices remained fairly stable at around US$0,74 to US$0,76 per pound for most of 2013 and 2014 until dropping to US$0,65 per pound in April of this year.
“During the same period, international cotton prices climbed higher, reaching US$0,99 per pound at their peak. However, the situation changed significantly in July 2014, with the Cotlook A index falling to US$0,80 while polyester has climbed back up to around US$0,73 per pound,” Icac said.
A pound is equivalent to about 0,45 kg.
Icac said the price of cotton in China had also fallen to US$1,26 per pound from US$1,41 during most of 2013/14.
“With polyester and cotton prices converging, world consumption of cotton is forecast to increase by 5% to 24,5 million tonnes in 2014/15,” Icac said.
The expected increase in demand would be a boon for the local cotton industry that has been hamstrung by funding challenges affecting production.
The sector had also been affected by unviable prices which buyers blamed for the decline in international prices.
According to the 2014 national budget, Finance and Economic Development minister Patrick Chinamasa said cotton production was expected to grow by 27,8% this year.
Chinamasa said cotton output was forecast to grow to 180 000 tonnes in 2014 from 140 000 tonnes in 2013 on the back of anticipated increases in local demand.
“Cotton output is estimated to have declined from 350 000 tonnes in 2012, to about 140 000 tonnes this year. This is largely due to the decline in hectarage planted which fell from 450 000 ha in the 2011/12 season, to 241 849 ha in the 2012/13 season,” Chinamasa said.
He said the decline was attributed to fewer farmers growing the crop due to unviable prices that had been offered by local merchants during the previous season.