950823

CEC charging carrying

charges despite

MoC waiver

AFZAL AHMED

KARACHI: Textile mills that have purchased cotton offered by the Cotton Export Corporation (CEC) are facing problems as the CEC is charging carrying charges from them from the date of the signing of the sale contract.

Textile industry circles told Business Recorder that the CEC is charging the mills Rs 1.35 per maund per day upon delivery of the purchased cotton as carrying charges and these are applicable from the day the purchase contract was signed between the mill and the CEC.

Keeping in view the transportation problems on account of the countrywide floods, the Ministry of Commerce had earlier granted permission to the textile mills to lift their contracted lots witin 14 days of the signing of the pruchase contract without any carrying charges. But the CEC is not extending the same facility to the mills.

In one instance, it has also been reported that the CEC charged the carrying charges from a textile mill from August 21st whereas the agreement with the mill was signed on August 22nd.

Another issue causing concern among textile mills is the CEC deadline to all textile mills to lift their purchased stocks by August 28th. If this is not done, their security money (Rs 150,000) would be confiscated and their contracts cancelled.

This has particularly caused concern among those textile mill owners who have signed agreements during the latter half of August, as they did not get the 14 day's time allowed by the Commerce Ministry before delivery. "We not only have to pay the carrying charges but also have to lift the stock in such short time," they said.

Since the Chairman of the CEC has left for the USA for "Medical Checkup", the Director Administration who is acting on his behalf, was "busy" and not available to give any clarification on behalf of the CEC.

The CEC, upon instructions of the government had offered 60,000 bales (240 kg each) for sale to the textile mills at no-profit no-loss basis in order to provide them with some relief from the shortages created due to cotton crisis in the country. Fifteen thousand bales were offered to each applicant mill on first-come-first-served basis at a price tag of Rs 2350 per maund which was later reduced to Rs 2115 per maund after a hue and cry from the textile mills that the rates were too high.

Meanwhile, sources in the industry told Business Recorder that the CEC has requested the government to allow sale of some more quantity as all the offered 60,000 baels had been purchased by the textile mills, who were still prepared to purchase more considering the shortage of raw material in the market and the prevailing high prices of the commodity.