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KCA urges

Govt to allow

hedge trading

KARACHI: Karachi Cotton Association (KCA) has urged the government to allow hedge trading in cotton from the commencement of the new cotton season 1995-96 for smooth and proper conduct of national and international trade in cotton.

Chairman KCA, Abdul Sattar Balagamwala said on Wednesday that hedge trading performs an economic function and provides a cover against the risk of price fluctuation to all segment of the cotton economy, including farmers, ginners, exporters etc.

He said it stablises the market and ensure efficient marketing of cotton crop, besides ensuring international prices of cotton to growers and providing raw material to ailing textile sector.

He said hedge trading is a delivery contract, stipulating delivery on the maturity of the contract. In fact, in the past, when the hedge market was in operation, deliveries have been made to buyers even upto 115,000 bales during one month.

Balagamwala said hedge trading was already in operation in Pakistan oil seed cake market, the stock exchange and the currency market and it can be started in cotton market without any problem.

He said very little time was left as new cotton season was due to start from 1st September this year.

He said that KCA has already made all the necessary amendments in the by-laws of the association to effectively conduct hedge operations.-APP