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Pakistan : Brisk trade at cotton market |
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2004-8-9
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The Trading Corporation of Pakistan (TCP) will start buying 0.1 million cotton bales from the local market by the end of next week after deciding price mechanism with the traders.
Shaukat Aziz, the federal finance minister assured this at a meeting with ginners in Islamabad on Friday. The minister said the TCP would start buying from next week and asked ginners to set price mechanism with the TCP.
“The TCP would hopefully start the task by the end of next week,” Jeth Anand Kohistani, chairman Pakistan Cotton Ginners Association (PCGA), informed after the meeting.
“As per directives of the minister, we would soon sit with the TCP to set per maund bales prices on which they (TCP) would buy cotton,” he added.
The PCGA chief, who led association’s delegation at the meeting, said after the TCP’s intervention ginners would hopefully start operations as per the announced schedule.
“If the TCP starts buying then why would we strike and shut down operations,” he said and added all 1,200 ginning factories would start operations as per the announced schedule.
Last month, PCGA shut down operations of over a dozen ginning factories and decided not to start operations of over 1,200 factories as per schedule till 0.35 million bales lying in stocks are sold.
As per the PCGA last month’s announcement ginning has to start in lower Sindh from August 15, and from September 15, in the rest of Sindh and Punjab.
Ginners said the finance minister had assured them that the TCP would continue bale lifting operation from the local market throughout the next season and directives for 0.1 million bales is just a start.
“Currently the TCP is intervening for last season crop,” PCGA’s Anand said.
“But the minister has assured us that the TCP would continue such role for next season too to protect cotton trade and growers.”
But during the meeting with ginners, the minister refused to put a ban on cotton bale imports, saying it was a need of local industry and could not be restricted.
“But he (finance minister) agreed to regulate cotton imports and sought our proposal as was asked by the commerce minister,” said Farooq
Sheikh, member central executive committee of the PCGA, who also attended the meeting.
He said traders and ginners would meet soon to finalise proposals and hopefully submit it to both the finance and commerce ministries within a month.
Humayun Akhter Khan, the federal minister for commerce, in a meeting with ginners on Friday already agreed to regulate cotton bales import in the country in an attempt to protect local traders and growers.
Country’s spinning industry is expecting import 3 million to 4 million bales next season, which has attracted criticism from ginners, who say import plan would hurt local cotton traders and growers.
According to Textile Commission during the last season the industry had imported around over 2 million bales from different countries.
Meanwhile, ginners observed the TCP would lift cotton bales at almost the existing price prevailing in the local market.
“The per maund bale price has yet to be decided,” said Sheikh of the PCGA. “But we think the TCP would lift at almost existing prices as the government has already set the support price of phutti and if it is calculated for per maund bale price, it comes equal to existing market prices.”
The ministry of food, agriculture and livestock in its cotton strategy report for 2004-05 released last month, enhanced support price of phutti by Rs 75 per maund to Rs 925 per maund for fiscal year 2004-05 against Rs 850 per maund in 2003-04. |
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