Olam, which is listed on the Singapore Stock Exchange, with an annual turnover and market capitalisation of US$4 billion and US$5 billion respectively, is currently the second largest operator in cotton locally after Cottco.
The company’s presence in Zimbabwe’s cotton sector began in 2005 with the introduction of its input scheme model, with a spot cash payment system for cotton farmers at competitive prices.
“We are currently engaged with up to 26 000 cotton farmers who are committed to 52 000 hectares of land and are looking to substantially improve the quality of yield per hectare through such important partnerships,” said Sam Placid, Olam senior vice-president and cluster head for Southern Africa.
“Small-scale cotton growers in Zimbabwe have been growing in number and it is our intention to encourage the growing of a quality crop while assisting farmers to create wealth for themselves.”
Olam’s input support in the country is valued at more than US$5 million to communal, non-bankable farmers.
“We raised US$2 billion for capital expenditure in the financial year 2010 and we are commited to supporting the growth and development of agriculture in Zimbabwe,” said Varun Mahajan, the country head for Zimbabwe and Zambia.
Besides cotton, the company is involved in local maize and soya procurement, providing immediate cash to farmers.
“We also facilitate wheat imports for millers and provide them with credit facilities during low liquidity periods,” Mahajan said.
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In early July, cotton farmers withheld their produce in protest against low cotton prices that were being offered by merchants , whom they accused of short-changing them by buying the commodity at prices below the agreed prices.
The farmers had then been offered a minimum price of US$0,75 per kg while the selling price has since been reviewed to a minimum of US$0,85 per kg.
ZCFU urges increased cotton production
Zimbabwe Commercial Farmers Union President, Donald Khumalo said although cotton farming had many challenges, it was necessary for all stakeholders from both government and the private sector to encourage increased cotton production levels.
“The traditional cotton farming areas of Midlands, Masvingo and Matabeleland have increased crop production but we need to encourage more hectarage as this will certainly help in the resuscitation of the local textiles industry,” Khumalo said.
