Tinashe KairizaÂ Business Correspondent
The global cotton hectarage will tumble six percent next season as prices for the crop remain persistently low, the International Cotton Advisory Committees aid.
In Zimbabwe, the impact of lower prices ranging between US$0,35 cents and US$0,46 cents per kilogramme last season, has since triggered a decline in the land area put under cotton as farmers opt for better paying commodities.
âLow cotton prices are expected to persist through the rest of 2014 /2015.
âAs a result, the world cotton area in 2015 /2016 is projected down 6 percent to 31,6 million hectares,â said the International Cotton Advisory Committee in a press statement released on Monday.
The Committee further projects world cotton output to drop six (6) percent to about 25 million metric tonnes in 2016 as farmers shift focus to crops such as maize and soy whose prices are now firming.
âAssuming a world average yield of 777kg/ha, world cotton production is forecast to fall 6 percent to 24,6 million tonnes which is the lowest since 2010,âsaid the International Cotton Advisory Committee.
âIn 2015-2016, cotton is likely to be much less attractive to plant due to falling prices while prices for competing crops such as maize and soy have recovered from price downturns.â
Farmers in India, the worldâs largest cotton producer have also begun trimming hectarage as trends of lower prices appear to persist in the long term.
Zimbabwe Farmers Union (ZFU) Executive Director Paul Zakariya said depressed cotton prices on the international market have crippled the capacity of local contracting firms to finance production of the crop.
An estimated 99 percent of the southern African countryâs cotton is produced through contract arrangement schemes.
âThe impact of low prices on the international market is that it has shrunk the capacity to contract.
âWith companies like Cargill closing down, farmers now need to find new contractors,â he said.
As contracting firms scale down operations, Zakariya said local small scale farmers would struggle to self-finance cotton production.
âNot many of our farmers are able to produce cotton from their own pockets.
âAt the moment there are no windows through which local farmers can borrow to produce,â he said, noting that âcotton will not be a favourable crop to grow in the next 2 years.â
Last year, Zimbabwe produced 114 724 metric tonnes down from 133 017 metric tonnes of cotton produced during the previous season.