The Cotton Company of Zimbabwe (COTTCO) says it is taking measures to ensure it does not run out of US dollar notes during the forthcoming marketing season.
The 2023 cotton selling season is just around the corner as it usually commences in May.
Speaking in an interview with Business Weekly, COTTCO acting accounting officer Munyaradzi Chikasha revealed that they were negotiating with its international buyers for the provision of US dollar cash in the event that local banks run out of notes. Chikasha said:
We have noted that the issue of liquidity could affect us and disrupt the marketing season.
We have approached our customers to bring liquidity so that we avoid disruptions.
We are negotiating the facilities with local banks- our previous experiences show us that they may run out of physical notes and when this happens, it opens pathways for side marketing because a farmer can’t keep the crop waiting for us to get cash.
But that of course comes with guaranteed tonnage that will be supplied to off-takers.
He said COTTCO has a debt of about US$3 million are negotiating for a debt rollover.
Last season, COTTCO initially expected an output of 116 000 tonnes but the company only bought 48 000 tonnes.
This year, the company is expecting output to reach 100 000 tonnes.
The lowest grade (D) will fetch US40c per kg while the premium grade (A) will be sold at US46c per kg.
Farmers will be paid 85 percent in US dollars and the remainder in local currency at the official interbank rate.
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