The cotton industry has moved to stem side-marketing of the crop by setting up a new system for procuring seed cotton.
BY BUSINESS REPORTER
In its annual report, cotton buyer Cottco Holdings said the new system, the common buying model (CBM), is premised on a market share derived from the level of inputs funding by each merchant.
“Side-marketing is likely to be curtailed in the coming season since the industry has decided to use a new system for procuring seed cotton,” Cottco said.
Cottco said the business managed to raise $3,7 million despite lack of funding from financial institutions.
“Buying costs will be shared among merchants based on market share,” Cottco said.
At Cottco’s annual general meeting held last week, the company’s acting managing director Chris Murove said the buying of cotton in the just-ended season was well organised and managed by the Cotton Ginners, Association, under the supervision of the Agriculture Marketing Authority. He said the process eliminated the perennial problems of side-marketing.
In the just-ended season, national cotton output declined to 90 000 tonnes down from 135 000 tonnes during the previous season.
Government is set to take over Cottco’s $32 million debt through converting it into equity. Government will do so through the Zimbabwe Asset Management Company (Zamco). All local banks have confirmed their participation in the Zamco initiative.