The Confederation of Zimbabwe Industries (CZI) says price distortions are constraining smooth operations in the cotton-to-clothing value chain where local spinning companies and downstream operations are facing lint shortages despite the availability of the raw material at home as ginners prioritize exports.
The situation is inducing a crippling strain on cotton to textile-related industries which are forced to source foreign currency to import lint, which increases costs of production and threatens business viability and jobs.
The cotton value chain provides economic and livelihood synergies through vertical and horizontal linkages with the textile, apparel, yarn, fabric, oil processing, and stock feed among other industries.
In the latest research paper titled: “Pricing Distortions as a Constraint to Smooth Value Chain Operations: The Case of Cotton Lint in Zimbabwe”, CZI says there is an outcry among industry players as spinning factories are struggling to secure the necessary raw material.
According to the report findings, local spinners find it hard to pay for locally-produced lint in US dollars at USAccording to the report findings, local spinners find it hard to pay for locally-produced lint in US dollars at US$0,30 per kg as they also make sales in Zimbabwean dollar terms.,30 per kg as they also make sales in Zimbabwean dollar terms.
“Cotton Company of Zimbabwe (COTTCO), a key player in the ginning of cotton and the main exporter of cotton lint, has proposed that it can only release the lint to local spinners at the 60:40 ratio in USD and ZWL price respectively.
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CZI said about 90 percent of the lint is exported, leaving local spinners with about 10 percent in a season (from May to September), which is insufficient to keep them spinning all year round.
