ISLAMABAD, Dec 15: The federal government has directed the Trading Corporation of Pakistan (TCP) to be aggressive in buying grade-III cotton to maintain a reasonable price for the farming community.

Informed sources told Dawn on Wednesday that TCP would also buy grade-II cotton till such time that the lint parity price of grade-III base cotton remains below the phutti equivalent of Rs925 per 40-kg.

The government feels that TCP's intervention in the cotton market was very important for the time being, although it did not have further capacity and required further credit for buying more cotton. Hence, the government would help TCP overcome these two problems.

The TCP has also been asked to explore the prospects of exporting cotton it has already purchased from the farmers. The ministry of commerce has also been directed to be vigilant about the cotton situation and suggest an appropriate time for the export of surplus cotton and also suggest how much subsidy the export would require.

These decisions come at a time when the textile sector is opposing the intervention of the TCP because it feels that the TCP role was resulting in "artificial" higher price.