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Spinners turning defaulters - PCGA
18
Jul '11
A majority of the textile spinning and weaving mill owners are dithering in making payments as cotton prices have slashed to Rs. 6,800 to Rs. 7,000 per maund, Pakistan Cotton Ginners Association's Executive Committee member Ehsan-ul-Haq has said.

He added that these mill owners bought cotton on credit basis when prices were touching Rs. 14,000 per maund.

Mr. Ehsan said that cotton ginners are experiencing severe financial crunch as their payments worth millions of rupees are being deferred by mill owners.

He said that due to a fall in cotton yarn prices in the world market, spinners are unwilling to pay their dues, while some of them have even asked the ginners to either take back their stocks or to wait till the situation turns better.

If the ginners choose to lift back their stocks from spinners, this would cause them to suffer loss of millions of rupees, which may equal to almost 50 percent of their actual investment, Mr. Ehsan said.

He also voiced his apprehension that as cotton output for the current season is expected to surpass the 15 million bales mark, this may lead to further reduction in cotton prices.

In view of the prevailing situation, Mr. Ehsan urged APTMA and other stakeholders to workout a viable solution to safeguard the ginners from falling prey to financial crunch and subsequent closure.

He said that financial crisis would not allow several ginners to embark on their businesses in the forthcoming season.

Hence, he called upon the Government to launch Trading Corporation of Pakistan (TCP) as third buyer in the market so as to bring an end to the monopoly of textile mill owners and traders.

He said this step would also safeguard the interests of the cotton growers who have cultivated 15 million bales this year to enable the country to gain self-reliance in cotton.

Mr. Ehsan stated that prior to this, it has never happened in the history of Pakistan that cotton prices witnessed a fall of Rs. 8,000 per maund within a short duration of just four months.

Fibre2fashion News Desk - India

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