Pricing distortions as a constraint to smooth value chain operations: The case of cotton lint in Zimbabwe

There is an outcry of lint shortages to local spinning factories and this has led to problems in the downstream industries. The pricing issue, which can be traced to the general exchange rate distortions in the country, remain at the core of having enough cotton lint for the well-functioning of the cotton to clothing value chain. While the resolution of the exchange rate remains a priority for both monetary and fiscal policy, there is an urgent need for an interim mechanism that is intended to bail out both the ginners and spinners by cushioning them against the effects of the parallel market premium.