Raw cotton exports: Zimbabwe misses out on potential mega earnings

CALLS for the country to export finished cotton products instead of raw lint are growing louder by the day amid revelations that lint exports generated US$88 million in 2021 when processed goods could have fetched US$304 million, marking a 247 percent revenue disparity.

Figures compiled by Zimstat show that exports of various products from cotton stood at 55 million kilogrammes worth US$ 88 million last season.

“If in 2021 the country had value added half of the cotton (not carded or combed) that it exported into men’s or boys’ shirts of cotton, then the country would have earned about US$304 million as opposed to US$88 million a giant 247 percent leap in one year,” read part of the report.

The statistics further revealed that the country exported an average of 63 million kilogrammes of various cotton products worth US$109 million annually at an average price of US$1, 74 per kg from 2010 to 2021.

Raw cotton lint is the country’s leading export commodity group at an average of 84 and 81 percent annually in volume and value terms respectively over the period 2010-2021.

The trend over the years has seen a gentle rise in the portion of raw cotton exported from a low of about 56 to a high of 95 percent.

It is this trend, which is worrying and needs to be reversed if the country is to achieve its Vision 2030 objective of a prosperous and empowered upper middle-income society.

Exports of yarn, a product one ladder up the cotton value chain went on an upward trajectory from about two percent in 2011 to a peak of 11 percent in 2016 before sharply dropping to around 4 percent currently.

A glimpse of the change in realised average price of various cotton products as we go up the value chain ladder clearly reveals an increasing price trend.

A look at the price trend, as the level of value addition increases, amplifies the call for the Government to offer incentives to would-be value addition entrepreneurs to invest in cotton beneficiation for increased foreign currency earnings, employment creation and general economic development.

Reacting to the statistics, Zimbabwe Textile Manufacturers Association chairman Mr Admire Masenda said the country should move from exporting raw cotton to selling value added products from the textile and clothing sectors.

“It bleeds my heart to find out that the textile industry has shrunk from employing around 20 000 workers in the 1990s to the current 3 500. The current installed spinning capacity stands at 12 000 tonnes from a high of 160 000 tonnes at the height of its operations.

“Where are we getting it wrong as a country? Why are ginners favouring exporting lint at the expense of yarn or other higher valued cotton products?” queried Mr Masenda.

Mr Masenda went on to explain that the current installed ginning capacity stood at 400 000 tonnes but with refurbishment, this could rise to 750 000 tonnes.

Cotton Ginners Association acting chairman, Mr Caos Nzenze, concurred ,saying at the peak of the performance, ginners are now employing about 3 000 employees – a far cry from the numbers they engaged in the 1990s.

Cottco acting chief accounting officer Mr Munyaradzi Chikasha added that his organisation would start value addition in the near future and had since applied for funding in that regard, as they pushed to ensure that they generated more foreign currency for the country. – Herald

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