The Cotton Company of Zimbabwe (Cottco) has offered an immediate payment option in local currency, ZIG in settlement of the outstanding balance of $1.4 million owed to the transporters who handled the movement of seed cotton bales throughout the 2022/23 cotton marketing season. The option is in response to growing pressure from transporters in the absence of US dollars which will be paid when the liquidity position eases.
This offer was made during a meeting held at the Cottco Head Office in Harare where the transporters demanded USD payments to cover operational costs they incurred during the season. Following the offer, 36 transporters who make up the bulk of those who attended the meeting accepted ZIG and their payments were settled immediately.
Transporters are a critical part of Cottco’s operations as they move voluminous bales of seed cotton from Common Buying Points to the ginneries. Cottco is committed to fair and timely remuneration for all our partners and is in ongoing dialogue with our transporters to find mutually beneficial solutions during these challenging times. Our goal is to ensure the sustainability and efficiency of the cotton value chain, and we are dedicated to making decisions that will benefit all parties involved in the long term.
Revenue from Cotton is received about four to six months after transporters deliver the crop to cottco, resulting in the company depending on working capital financing from banks to pay both farmers and transporters as well as bridge the gap between date of provision of service and date of receiving revenue from Cotton.
The past season, Cottco was unable to draw down adequate amounts to pay farmers due to liquidity constraints, this also affected transporter payments.
Cottco remains steadfast in its commitment to strengthening our partnerships and contributing positively to Zimbabwe’s economy. USD$1,2 million has so far been channeled towards transporter payments since last year. Transporters are among Cottco’s top partners in the cotton value chain hence they are a priority.
