Pakistan Cotton Ginners Association has decided to file a case in the Federal Shariat Court in an attempt to stop Pakistan Mercantile Exchange from futures trading in cotton.
The recourse to legal action is aimed at preventing what ginners say anti-Shariah futures trading that will spell financial disaster for cotton growers, ginners and textile millers.
In a statement, PCGA’s ex-executive member Ihsanul Haq said cotton ginners will hold meetings in all cotton zones shortly to decide its future course of action and find a way to block futures trading in cotton.
He recalled that in 2005 the Karachi Cotton Association had started futures trading, prompting the ginners to approach the Federal Shariat Court. In the case, the court granted a stay against futures trading in cotton.
In futures contracts, there is no physical buying or selling of cotton, but only profit or loss is calculated on the basis of price speculation.
Some traders earn a lot of money through futures trading and price speculation, but the resultant instability in cotton market deals a blow to the farmers, ginners and textile millers, according to Haq.
Published in The Express Tribune, May 24th, 2013.
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