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Cameroon – Agribusiness: Cameroonian state injected FCfa 6 billion in Sodecoton in 2015, to avoid reduction in purchase price for producers

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Written by Deckson N.

With an estimated cost price of cotton at FCfa 858 per kilogram, Sodecoton recorded a deficit of FCfa 35 on each kilogram of cotton exported, the world price of this raw material being around FCfa 823 only. In order to prevent a reduction in the producer purchase price of cotton (FCfa 265 the kilogram), which would have allowed the agro-industrial company to lower the deficit imposed by the world price decrease, the Cameroonian government has had to pay a subsidy of FCfa 6 billion in 2015 to Sodecoton, in order to balance its accounts, the government daily revealed.

However, if this subsidy allowed the deficit of FCfa 4.1 billion recorded on cotton exports to be narrowed, the government assistance has not however entirely balanced the accounts of this company, flagship of agro industry in the northern part of Cameroon. Indeed, in 2015, we learn from the same source Sodecoton lost FCfa 10 billion as a result of bad weather that damaged part of the production, to which must be added a total loss of FCfa 8 billion recorded in 2014.

Calculator in hand, over the period 2014-2015, Sodecoton recorded losses estimated at more than FCfa 22 billion, of which only FCfa 6 billion were covered by the subsidy from the state. To stay afloat, we learn, the company has submitted a FCfa 30 billion investment plan, whose delay in implementation is due to the indebtedness of the company.

About the author

Deckson N.

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