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  • 3.6-COTTON MARKETING-DOCUMENTATION (‘BACK OFFICE’)

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  • Documentation (‘back office’)

    Chapter 3 - Cotton marketing - Documentation (‘back office’) 

     
     
    International cotton transactions are executed by transfer of title rather than by the physical handing over of cotton. Title to goods shipped under contract by sea from one country to another is represented by the bill of lading, accompanied by a set of additional documents, together known as the shipping documents. The document of title for goods already stored in the port or place of delivery under a spot contract can be a warehouse receipt or storage warrant issued by a recognized public warehouse. The only difference between the traditional chain of paper documents and electronic documentation is that the paper is largely eliminated. This is why using electronic documentation is sometimes also called paperless trading. Using electronic documentation does not change the contractual responsibility of the seller or the buyer: the only differences are in how and when documents are issued, and how and when they are made available to the buyer.

    Shipping documents must always comply in all respects with the conditions of the contract between the parties. If they do not, a seller may not be paid on time, or, in extreme circumstances, may lose the money altogether. The shipping documents must therefore show or state that they represent the contracted and shipped cotton, that a known series of shipping rules has been complied with, and that they conform in all respects to the sales contract between the parties and to the standard form of contract on which that sales contract is based. Shipping documents must also be presented on time. Nothing is more annoying than late presentation of documents.