Source: Agritrade

Zimbabwean cotton production expands, while global cotton subsidies remain high

06 octobre 2011

According to press reports, Zimbabwe’s cotton shipments in 2010–11 will increase by 20% to 408,000 bales. Zimbabwean cotton typically attracts a premium on international markets because of its quality. The improvement in production follows legislation which has ‘brought stability’ to the sector. New regulations establish a clearer and more stable legal framework for relations between growers and ginners, and this is improving supplies of seeds and chemicals to small-scale growers, while curtailing ‘side marketing’ by producers, whereby they sell their crop to a company other than the ginnery supplying the inputs. This needs to be seen against the backdrop of farmers’ actions in early July 2011 which saw production being withheld from the market in protest against low cotton prices. Subsequently the minimum selling price was raised from US$0.75/kg to US $0.85/kg.

In July 2011 it was reported that the Singapore-registered company Olam was seeking a deal with the government of Zimbabwe ‘in order to enhance the country’s cotton production levels’. The company is already the second largest operator in the Zimbabwe cotton sector, servicing 26,000 cotton farmers producing on 52,000 ha of land. The aim of the deal is to improve the quality and yield of cotton produced.

At an international level, press reports indicate that ‘world cotton producers received $1.3bn in subsidies’ in 2010–11, ‘despite market prices doubling to a record high’ (from $0.78/lb to an $1.64/lb). Data from the International Cotton Advisory Committee imply that ‘with output rising too, the value of farmers’ cotton crops soared to more than $90bn, from $38bn the year before’.

The press report notes that ‘while the headline level of payments more than halved, from $3.2bn in 2009-10, the decline was nearly all accounted for by China, the top cotton producing country’. This led the EU to take top spot ‘in the global subsidy league – even though the EU produces less than 1% of world cotton’. In 2010/11, ‘the European Union lifted its support by 4.2% to $368m’, although this was in part a statistical anomaly linked to the weakening of the US dollar against the euro. The analysis notes the ongoing failure of the US to reform its cotton subsidy programmes, despite the findings in the WTO against its support programmes.