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Pak mill owners, ginners spar over cotton procurement
Sep '15
A fight has erupted between Pakistani textile mill owners and cotton ginners over government procurement of cotton, according to reports in the country's media.

The Pakistan Cotton Ginners Association (PCGA) has demanded that the government should mobilise the Trading Corporation of Pakistan (TCP) as an alternative buyer of cotton in the market and also announce support price of the commodity. But the All Pakistan Textile Mills Association has said that the government's intervention in the free market mechanism would be imprudent.

PCGA chairman Haji Hafeez Anwar told reporters that the government should start buying cotton through the TCP within a week to avoid financial strain on farmers. He claimed farmers were being exploited by textile mill owners and that the industry this year is picking up crop only for the current requirement, whereas earlier they used to make purchases for the future as well.

The PCGA chairman urged the government to facilitate manufacturers and exporters to generate demand for cotton and guarantee the full utilisation of the current cotton crop.

He said that support price fixed by the government would help the farmers in ensuring fair return of their produce otherwise farmers would be shifted to alternate products instead of cotton.

The PCGA chairman said that APTMA was the sole buyer of cotton in Pakistan and had developed a cartel to purchase cotton at the cheapest price. He demanded that the government should announce the support price of seed-cotton and introduce Trading Corporation of Pakistan (TCP) as the third player in the market to stabilise prices and save the farmers from financial losses. He also demanded a ban on the shifting of sugar mills to Southern Punjab which had been declared as cotton belt and take effective measures for the protection of the cotton economy and to promote the export of textile products. Anwar said the government should give incentives to the exporters of cotton so that cotton export would bring stability in prices and farmers could get fair return of their produce.

But the APTMA has criticized a likely government move to procure seed cotton equivalent to one million bales at the support price of Rs 3000 per 40kg.

APTMA chairman SM Tanveer told a press conference in Lahore that the cost of production for cotton growers was very high, as the price of urea has been increased by Rs150 per bag and diesel prices have been raised by 45 per cent.

He recalled that the Trading Corporation of Pakistan had procured 90,000 cotton seed last year and incurred a loss of one billion rupees. “An independent inquiry should be made that why the Corporation has incurred such a huge loss last year,” he added.

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