KARACHI, July 23: Cotton traders have welcomed the new annual trade policy announced by the commerce minister on Monday as it gives a number of incentives including freight subsidy to those exporters who will explore new export outlets.

The perception that the lint intake of the textile sector will further increase buoyed both ginners and brokerage houses, which could well mean hectic activity on the market, market sources said.

But what enthused most the entire sector associated with the cotton trade was commerce minister’s hint at resumption of hedge trading during the current fiscal.

He said the reports of the committee set up some months back has been received and legal cover will be provided to hedge trading before its resumption possibly by next September.

Spinners, ginners, and brokerage houses have been demanding the resumption of forward trading to restore stability to cotton prices and welcomed the commerce minister’s swift action on the issue, market sources said.

The forward trading in cotton was banned in mid-70s after the nationalization of ginning factories and since then the Karachi Cotton Association (KCA) is making representation in various forms and at various forum including a recently held seminar in Karachi on the subject.

Meanwhile, the Karachi Stock Exchange has already obtained permission from the Securities and Exchange Commission of Pakistan to start forward trading in commodities including cotton from September this year.

Owing to positive developments on the issue of hedge trading in cotton, spinners remained busy discussing the possible date for the official nod and procedural problems associated with it.

Physical shipment of lint cotton against the firm L/Cs are being made to meet the deadlines and 0.190m bales have been shipped till July 15 to various countries against the total foreign sales of 0.256m bales.

Official spot rates, therefore, remained pegged at the overnight levels in the absence of strong mill demand.

Ready business was slow as till late in the evening about 1,000 bales changed hands, the following being some important deals: 100 bales, new crop Pithero at Rs.1,850.00, 200 bales each, K-68 current crop, Dharki and Gothki at Rs.1,930.