HomeBusiness DigestDecline in cotton output to worsen forex shortages

Decline in cotton output to worsen forex shortages

Eric Chiriga

THE shortage of foreign currency is set to worsen as Zimbabwe’s cotton output is expected to decline by 31% this year.

serif”>According to the Commercial Cotton Growers Association, cotton output will fall from 331 000 tonnes in the 2003/4 season to 228 000 tonnes in 2004/5 due to lack of fertilisers, draught power and poor rainfall.

This will have a negative impact on the economy, as cotton lint is the second largest foreign currency earner after tobacco.

In 2004, inflows into the Reserve Bank of Zimbabwe from cotton were US$117,3 million and actual shipments and free funds were US$134,5 million.

This year’s target is US$162 million.

Agriculture used to contribute about 16% to the country’s gross domestic product (GDP).

“We were pinning our hopes on cotton as a significant foreign currency earner since the country has already lost in tobacco,” economic analyst, John Robertson said.

He said other foreign currency earners like timber and beef have lost enormously.

He said besides the reduction in cotton output, the country would also suffer another blow from the drastic 40% cut in the international cotton price.

“Next year no cotton is likely to be produced because growers won’t have enough money to buy lint and other inputs,” Robertson said.

However, non-tariff barriers imposed by international buyers inhibit the marketing of cotton.

Mali, Africa’s largest producer of cotton, is expected to produce about 600 000 tonnes of cotton in 2004/5, while Burkina Faso, Chad, Nigeria and Benin are also expected to record increases favoured by good rainfall patterns.

Recent Posts

Stories you will enjoy

Recommended reading