KARACHI, Aug 4: Physical trading on the cotton market on Monday remained suspended as ginners vowed not to resume ginning operations until their demands are met by the relevant authorities.

In a meeting held in Multan at the head office of Pakistan Cotton Ginners Association (PCGA) the ginners decided that they would keep their factories close until their demands about the renewal of licenses and withdrawal of Rs5 per bale fee to be collected by the excise department are accepted.

Some officials, however, said the fee is refundable at the end of the season but ginners claim it was not mentioned in the official circular, which means it has been levied as a tax along with an increase of one per cent in the sales tax.

A fee or tax at the rate of Rs5 per bale is on the higher side, said a leading ginner, adding calculated at an average annual production of 10m bales, the total will run into millions of rupees.

“What is more disturbing is that the job of collection is entrusted to the excise department, which will open the floodgate of corruption and disputes on the number of bales turned out by a ginnery and the tax amount,” he added.

“Out of 1,200 or odd ginning factories, about 50 to 60 of which had resumed operations early last month have now shut their business to the disadvantage of those spinners, who buy their lint intake on daily basis owing to financial problems,” floor brokers said.

“They may have to shut down their business as the raw material is not available,” floor brokers said.

But some of the leading spinners and mills, whose stock positions are comfortable, may continue their operations to meet their forward export commitments both for cotton yarn and textiles, they said.

But they, too, are worried amid fear that there will be a pressure on supplies if the strike drags on as ginners claim it is “indefinite until their demands are met”.

Barring a deal of 200 bales, from a Burewala ginnery done late on Saturday at Rs4,250 per maund, ready business remained at a standstill on Monday.

Local ginners said there was no official word on their demand so far and their strike will continue on Tuesday also if there is no official intervention.

In the absence of ready business, there was no change in the official spot rates, which were quoted unchanged at Rs4,250 per maund.