The Agricultural Marketing Authority (AMA) has suspended cotton buying licences for three private contractors for allegedly failing to meet the Reserve Bank of Zimbabwe (RBZ) forex requirements.
The three private cotton contractors whose licences have been suspended are Grafax, ETG Parogate Zimbabwe and China Africa.
Investigations by the ZBC News revealed that the three companies came under the spotlight after they attempted to circumvent the RBZ Foreign Currency Exchange Act, which stipulates that buyers of cotton should bring and declare foreign currency to buy the crop to the apex bank.
Instead, the three companies wanted to undermine the central bank by using bond notes in their local accounts to buy and export the cotton, a move which was likely to prejudice the country millions of dollars in foreign currency.
This is not the first time that the private cotton contractors have caused mayhem in the cotton sector as farmers are up in arms with some companies for distorting the markets and swindling them of the cotton year in year out.
Some of the private cotton contractors have reportedly been positioning themselves to buy cotton sponsored under the Presidential free inputs scheme.
Officials from AMA, who preferred anonymity, indicated that the suspension of three private contractors from buying the white gold can be lifted if they fulfill the RBZ requirements on time.