KARACHI, July 28: The Karachi Cotton Association (KCA) on Saturday expressed concern over the suspension of registration of export sales contracts of raw cotton by the Trade Development Authority of Pakistan (TDAP).

The State Bank of Pakistan, on the instructions issued by the TDAP, discontinued accepting bank guarantees or security deposit against the registration of export sales contracts of raw cotton from this month, according to a statement by the KCA.The TDAP also arbitrarily discontinued registering export sales contracts of raw cotton from July 1.

The association said that the export of cotton was being governed under the SRO No. 767(1)/2009 dated 04-09-2009 issued by the Ministry of Commerce, which was still valid.

According to KCA’s statement, if the government did not allow the registration of export sales contracts of raw cotton, foreign buyers who might be interested in purchasing the new cotton crop of 2012-13, could switch to other regions.

This would negatively affect the county’s economy due to loss in foreign exchange along with the cotton growers as they would not be able to procure an international price.

According to reports, Pakistan might harvest a bumper cotton crop in 2012-13 and in order to market the crop effectively and efficiently abroad, the government should allow the registration of export sales contracts of raw cotton, said KCA.

The association also urged the authorities concerned to issue necessary instructions to continue to allow registration of export sales contracts of raw cotton and also for the SBP to accept bank guarantees.—APP