LAHORE: After a meeting between all the stakeholders of cotton trade on December 28, textile mill owners have decided that the Trading Corporation of Pakistan (TCP) should not intervene in the free market mechanism.
The participants of the meeting argued that as of December 15, as many as 11 million bales of cotton had arrived, with more expected to come by the end of December. They pointed out that 95% of the cotton crop, estimated to be around 12.58 million bales, would be out of the hands of the cotton farmers and TCP intervention would only benefit cotton hoarders.
Chairman All Pakistan Textile Mills Association (APTMA) Mohsin Aziz said that cotton prices had surged abnormally to $2.2 per kg last year but APTMA had not asked for government intervention even for a single day and instead let the mechanism of free market work.
At the moment, he added, a fall in cotton prices was a global trend and APTMA had nothing to do with it, therefore Pakistan Cotton Ginners Association’s (PCGA) accusation that APTMA was manipulating the market was baseless.
“It is not manipulation but speculation of a few ginners that is creating a fuss,” Aziz said.
The textile association president added that 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.
“There should be an equal chance for every stakeholder to avail the opportunity and the government should not discriminate,” he added.
The APTMA Chairman said that the textile industry was facing severe energy crisis and it would prefer to sell its stocks to the TCP rather than converting them into yarn on heavy losses.
Pakistan’s ministry for textile industry, Karachi Cotton Association (KCA) and cotton exporters attended the meeting.