A meeting of the textile industry ministry was held on December 28 with the stakeholders of cotton trade including industry, Karachi Cotton Association (KCA) and cotton exporters to agree on no TCP intervention in the free market mechanism. The Trading Corporation of Pakistan (TCP), therefore, is not likely to intervene, as the ministry was convinced by the participants.
It may be noted that the proposal of PCGA for lifting of their remaining cotton stocks through TCP amidst falling prices was pending with the textile ministry.
The participants of the meeting argued that as of 15th December 2011, as many as 11 million bales of cotton had arrived, which would further increase by 31st December 2011 to around 12.2 million bales.
They pointed out that crop lifting data suggests that 95% of the cotton crop, estimated to be 12.58 million bales, would be out of the hands of the cotton farmers. Therefore, the intervention would not yield any benefit and if so, it would benefit only cotton hoarders.
Chairman All Pakistan Textile Mills Association (APTMA) Mohsin Aziz said, cotton prices surged abnormally to $2.2 per Kg last year but APTMA did not ask for government intervention for a single day and instead fought for continuity of free market mechanism.
Right now, he added, fall in cotton prices is global phenomenon and All Pakistan Textile Mills Association (APTMA) has nothing to do with tumbling cotton prices therefore PCGA's propaganda of manipulation the market by APTMA was baseless. It is not the manipulation but speculation of a few ginners that has created fuss recently, he said.
He said the TCP's intervention, if inevitable in any case, should be broad-based and APTMA should also be allowed to bid for TCP's tender against 4.5 million stocks with industry at present. There should be an equal opportunity for every stakeholder to avail the opportunity at the cost of exchequer and no discrimination should be made by the government, he added.
He said the textile industry was passing through severe energy crisis and it would prefer to sell its stocks to the TCP rather converting it into yarn on heavy losses.
All Pakistan Textile Mills Association (APTMA)