By Ndafadza Madanha
COTTON is expected to earn $70 million through export of lint but the figure could double if value addition is done.
According to Cotcco managing director Pious Manamike the company has experienced resurgence in cotton output attributable to the presidential free input scheme.
“90 percent of the lint is exported but if we value add to yarn we double the earnings.Lint is currently fetching $1.50 a kg while yarn is over $3 on the world markets.
Forecast 2018 Revenues Export Earnings $70million, Local Lint and Ginned Seed Sales $32million Total $102million
From 2016/2017 Cottco was tasked with distributing inputs and supporting the farmers under the Free Presidential Free Inputs Scheme and national production has been on the steady increase since,” said Manamike.
National production of cotton in 2017/2018 has more than doubled from last year to an estimated 140,000 tonnes with Cottco’s share of output amounting to 127,500tonnes. Average output per hectare is 300-500kg below optimal levels of 800kgs a hectare.
Manamike said about 400,000 rural farmers are earning income impacting the lives of an estimated 2million people.
Manamike said government should scrap the 2% tax for cotton farmers as it eroded their income and waiver the ZIMRA 10% withholding tax as it did for tobacco farmers.
During this year Cottco made payments to farmers and transporters of $72million mainly through Ecocash and One Money. He said the 2% tax would amount to an additional $1.3million cost to farmers.
He said duty on wool packs distributed to farmers should also be exempted from duty to ensure the company recovers.
Government is on the verge of taking over Cottco after it assumed its $56 million debt through ZAMCO.
“In 2015 government took over the debt of Cottco and we are in the process of being taken over by government through a debt to equity swap once that is done government will be the major shareholder through ZAMCO which is a subsidiary of the RBZ”.