MULTAN, March 30: A meeting to envisage strategy for disposal of the cotton purchased by the Trading Corporation of Pakistan in the year 2004-05 is being held in Islamabad on Thursday with federal commerce minister in the chair. The meeting was originally planned to be held on Wednesday (March 29) but due to some unknown reasons it was rescheduled for Thursday.
The federal ministers for agriculture, textile and production have also been invited to attend the meeting besides the prime minister’s adviser on finance and revenue. Besides the TCP chairman and the textile commissioner, the representatives of Aptma, KCA, PCGA and growers have also been invited to deliberate upon the issue.
The TCP has reportedly procured about 1.5m bales of cotton this year from the ginners at the rate of Rs2,159 per maund (37.324kg) of lint cotton (or 44 cents per lbs) as the public sector intervention to keep the domestic market stable in the backdrop of an all time bumper cotton crop.
When the TCP was striking deals with the ginners at its rate during the season, the price in the open market was less by Rs150 to Rs200 per maund of lint cotton. The corporation had then even sold few thousand bales of cotton in the export market but reportedly at a price 4 cents (per lbs) less than its procurement price.
Owing to these two factors, the TCP authorities had reportedly made it rather customary to warn in every official meeting that the government might suffer losses of Rs6 billions on account of its cotton procurements, although the corporation had made hefty profits against its stocks of cotton four years ago when it had entered for the first time as the official buyer of cotton after abolishment of the Cotton Export Corporation.
Experts say that the TCP should declare grade of each of the cotton lot from its stocks before the government may chalk out plan for their disposal. Besides, the corporation should also assess value of its cotton stocks at the current open market rates so that it can be appraised that whether it has done a business of loss or profit in the name of subsidizing the farming community.
It may be added here that the TCP has piled up cotton stocks at a price equivalent to 44 cents per lbs while at present the spot rates in the international market are more or less 55 cents per lbs for index B cotton.
