20000419

Cotton association

wants TCP's role

for itself

RECORDER REPORT

KARACHI: The exporter-dominated Karachi Cotton Association (KCA) wants to replace the Trading Corporation of Pakistan, which has been given a prominent role in the new cotton policy.

The board of directors of the KCA met on Tuesday to review the new cotton policy and welcomed it, with reservations. The policy allows free export of cotton from the very first day of the new arrival of the cotton crop. This was one of the most attractive move for the members of the KCA who generally export cotton.

Unlike the year 1998-99, the exporters made big money through exports this year, 1999-2000. So far, around 600,000 bales have been exported, said exporters.

However, the cotton policy kept a check over the cotton prices by allowing the TCP to buy whenever prices slips sharply.

This year the cotton prices touched the 15-year low. Both growers and ginners lost huge money compelling the government to bring in the TCP. The TCP bought over 500,000 bales and the prices went higher up Rs.1,500 to Rs.1,700 per maund, when the season was at its peak.

Before the intervention of the TCP, the prices were at Rs. 850 to Rs.1,100 per maund.

The board of directors found it difficult to accept any role for the TCP in the free market mechanism. They wanted the KCA to be allowed to play a role in stabilising the cotton prices.

When the prices were at the lowest ebb, the exporters got maximum benefit by exporting cotton. The government took serious note of it and the TCP was allowed to purchase and then export at a better rate.

Following is the press release issued by the KCA on Tuesday.

The Karachi Cotton Association (KCA) welcomes the timely announcement of cotton policy for the year 2000-2001 and fully endorses the decision of allowing the export of raw cotton at the outset of the cotton season.

The Board expressed reservations about the continuing role of TCP as a commercial operator. It felt that in the past also when the Government-owned agency was the exclusive exporter of raw cotton from Pakistan, the results of this operation were hardly encouraging and colossal losses ensued. Therefore, the Association believes that there is no need to revitalize the role of any Government agency in the export of raw cotton.

It was acknowledged that while the interest of the growers is to be protected against abnormal decline in prices and that the producers of agricultural commodities the world over are also guaranteed a minimum return under one scheme or another, the system announced by the government viz. TCP's intervention may not be a viable option. The government must consider using private sector for such intervention as and when necessary and the KCA has already submitted its proposals in this regard.

KCA supported the decision of the government for cotton grading and standardization system at the ginning level with effect from June 30, 2000 and hoped that all sectors of the cotton economy will be fully integrated in this operation.