ISLAMABAD, April 19: Pakistan Cotton Ginners' Association (PCGA) has opposed the government's move to open hedge and future trading in cotton, which, they believed, could not only endanger the economy but also result in disaster for ginners.

Well-placed sources told Dawn on Monday that PCGA has sought Prime Minister, Mir Zafarullah Khan Jamali's intervention to instruct ministries of finance and commerce not to allow future/hedge trading in the cotton. PCGA have strongly appealed to the government to reverse its decision regarding cotton hedge and future trading.

They were of the opinion that hedge trading was suitable in those country where production was double than consumption. And future market trading would support a lobby of speculators who were already active in stock exchange and other commodity markets.

According to a letter of PCGA sent to prime minister for consideration, a copy of which was made available to Dawn, the PCGA has opposed the move on the ground that consumption in Pakistan was more than production and the hedge facility for cotton exporters would introduce speculations in cotton trade.

Citing an example, they said that cotton hedge facility was successful only in New York where cotton production was more than consumption and they have to market the entire crop by selling forward and they needed to cover the risk in the hedge market.