20000301

Govt to procure all cotton in future

DR ZAFAR HASSAN

LAHORE: According to reports emanating from Islamabad, the government has decided to procure all the lint cotton fromÊthe ginners in future. The spokesman and also the Additional Secretary of the Ministry of Agriculture, Rashid Mahmood Ansari, told a press conference that this was being done to protect the interest of the growers. Cotton Commissioner Dr. Zakir Hussain, who was also present at the press conference, clarified that Chief Executive, Pervez Musharraf, in his statement made in Multan some time ago, had meant that the government would procure all the lint cotton from next season, and not seedcotton (kapas/phutti). It was also reportedly stated that the cotton policy for the next season (2000-2001) would be announced by the government on March 15 in which the growers will be given several incentives.

The cotton commissioner said that General Musharraf wanted to convey a clear message to the growers that the government would not allow any one to dupe them. Dr. Zakir Hussain further stated that the last three years' experiment with free play of market forces have played havoc not only with the growers but with the national economy as well.

The cotton commissioner further stated that cotton would be given a support price from the next season to avoid a price crash. Grading would also be done in the ginneries to enhance exports, the reports added. He accused the private sector of falsifying last year's (1999-2000) cotton production figures by decreasing the output figures to only seven million bales against the actual yield of about 8.8 million bales (170 kgs). He also accused the cotton traders of evading the sales tax on two million bales.

However, the Chairman of the Karachi Cotton Association (KCA), Maqbool Sadiq, stated recently that his association has always advocated a free cotton policy in respect of both exports, imports and domestic marketing and firmly believes that the free marketing mechanism is the best instrument for the efficient marketing of cotton domestically and abroad to ensure that all sectors of the cotton economy obtain an equitable and fair price in consonance with the international situation. Maqbool Sadiq added that the free market mechanism in cotton has worked very effectively since the deregulation of export trade. He feared that any government intervention would lead to disruption of the market. He pleaded that the KCA may be given an opportunity to participate in decision-making in respect of the new cotton policy. Other observers in the cotton market were of the view that lifting of entire cotton stock by the government would tantamount to nationalisation of the trade.

Nearly 10,000 bales, of cotton were transacted on Tuesday in a fairly steady market. Exporters are regularly covering their requirements against their foreign sales. Against total export registrations of 562,108 bales (170 kgs). There have been cancellations of 140,119 bales of cotton, leaving the net registrations to 421,989 bales. About 181,000 bales have already been shipped out during this season (September 1999/August 2000). The exporters are estimated to have purchased/covered nearly 350,000 bales from the market till now.

In ready cotton sales on Tuesday, 200 bales of cotton were bought by a mill from Sanghar in Sindh at Rs 1725 per maund (37.32 kgs) without the 15 percent sales tax, 600 bales of cotton from Chundko were picked up by an exporter at Rs 1800 per maund, 200 bales from Jam Saheb were sold at Rs 1800 per maund, 200 bales from Moro sold at Rs 1825 per maund, 600 bales from Ghotki and Daharki sold to a mill at Rs 1875 per maund against draft payment, 2,000 bales from Mirpur Mathelo, Daharki, Ghotki and Khanpur Mehar were sold to an exporter at Rs 1900 per maund, while 1000 bales from Daharki were said to have been sold at Rs 2100 per maund on an extended credit of four months after delivery.

Without the sales tax, 200 bales of cotton from Vihari and 400 bales from Kahror Pucca in the Punjab reportedly sold at Rs 1875 per maund (37.32 kgs), 1000 bales from Harunabad sold at Rs 1900 per maund, 400 bales from Rahimyar Khan sold at Rs 1925 per maund, while 1000 bales from Jalalpur Pirwalli were sold to an exporter at Rs 1950 per maund. Ginners continued to remain tight sellers in the evening.

In the meantime, the Trading Corporation of Pakistan (TCP) has sold another 75,000 bales (170 kgs) of different varieties to the foreign buyers in addition to the earlier sales of 76,910 bales, or a total of 151,000 bales out of the total stock of 525,000 bales procured by the TCP from the domestic market during this season.

The prices ranged from 46.25 cents a pound on fob Karachi basis for Alaka, to 47.05 cents for Afzal and 47.65 cents a pound for 1467 types. Leading international merchants participated in the tender floated by the TCP. The TCP has floated yet another tender for the sale of another 70,000 bales (50,000 bales of type Afzal 1-1/16 inch staple and/or 20,000 bales Alaka) on March/April/May seller's option basis, valid till 3.00 p.m. on March 8, 2000. Active participation is expected in a fairly firm market.