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THE 2005 cotton selling season has started on another ominous
note after merchants and growers failed to agree on the going
price for the crop, commonly referred to as "white
gold".
The impasse comes at a time when the early-maturing variety
is expected to be ready for picking before the end of March.
In pre-season negotiations merchants indicated that they
were prepared to pay around $1 000 for a kilogramme, which is
nowhere near the compromise price of $1 800 agreed to last
season.
It has since emerged that the growers and buyers are yet to
reach consensus on the pricing structure, amid fears that
their widely divergent positions could lead to another
"price war" this season.
This would make it the third season in a row in which
disputes have rocked the marketing of the crop, a major cash
cow in terms of foreign currency inflows.
The Cotton Company of Zimbabwe (Cottco), one of the major
buyers, is reportedly offering $1 000 for a kilogramme of
cotton, taking a cue from the international price which has
been falling in the last 12 months.
"Merchants are asking for $1 000 per kilogramme when
last year's prices closed at $1800 per kilogramme," said
Mr Obert Jiri, an agronomist.
On the hand, cotton growers' representatives are insisting
they cannot sell their produce for a "paltry" $1
000, setting the stage for an other bruising battle, adding:
"Farmers have since said they cannot comply with these
prices as it now costs them much more to grow a kilogramme of
cotton."
"Most farmers have stopped selling their product,
preferring to wait for the selling/harvesting season," he
noted.
However, Mr Jiri pointed out that since the law of
international prices dictated the price of cotton, it did not
make sense for growers to ask for anything above that
stipulated by that same law.
"There has been a drop in the international price for
cotton, thus we cannot expect our local growers to ask for
prices higher than the international ones," explained Mr
Jiri.
However, "price wars" have become a regular
feature of the cotton marketing season, reaching a climax in
the last two seasons.
Last season, the farmers were demanding a producer price of
$3 200 per kilogramme while Cottco was willing to pay not more
than $1 000. The deadlock was only broken after the Government
urged the parties to meet "halfway", setting the
stage for the "compromise" $1 800 per kilogramme.
Cotton prices on the international market are sensitive to
a number of changes especially massive subsidies offered to
growers in developed countries.
In recent years, supply has continued to outstrip demand as
cotton continues to face stiff competition from synthetic
fibres.
Cotton is the country's second largest agricultural export,
after tobacco, contributing about US$150 million gross
earnings to the economy last season.
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