KARACHI: The Karachi Cotton Association expressed its serious concern the report appeared few days ago that the government is likely to procure one million bales of cotton from ginners.
According to a press release, KCA is of the view that any intervention by the Government/Public Sector Organization in the cotton market would negate the policy of free trading in cotton being followed very successfully since past 18 years in order to safeguard the interest of all the stockholders of the cotton economy including the cotton growers.
The KCA has always advocated free trading policy in cotton i.e., free export and import of cotton without any quantitative and qualitative restrictions in order to ensure international price of cotton to the grower and provide a level playing field to all sections of the cotton economy of the country. The KCA strongly believes that under the demand and supply position, the market forces themselves/automatically determine the price level and exportable surplus.
The KCA recalls that the Government of India intervened in the cotton market few years ago and accrued losses by trying to regulate the cotton market and exports. Such intervention was reported not only to be counterproductive but has also largely disturbed and dislocated the entire cotton trade and industry in India as well as the growers and ginners who also suffered huge losses. Besides this, considerable shipments of cotton for exports were not made by the Indian suppliers and several defaults have occurred in exports of cotton from India.
The KCA believes that the future of stakeholders of cotton depends upon the continuation of a non intervention policy of the Government in the Cotton Trade so as to safeguard the interest of cotton growers and ensure them fair price for their produce.
In view of the above, the KCA strongly urges the Government not to make any intervention in the cotton market through Public Sector Organization as otherwise the operations of Public Sector Organization in the marketing of Cotton would involve huge losses, as was the case in the past, to the Government which would ultimately be borne by the Tax Payers. It would also cause disruption in the cotton economy of the country.