KARACHI, Feb 4: The Karachi Cotton Association (KCA) has urged the government to immediately allow hedge trading in cotton to safeguard the interest of all section of the cotton trade.

KCA chairman Zahid Bashir in a statement, issued here on Monday, said that wide fluctuations in prices of cotton had affected all sections of the cotton trade, particularly those holding unsold stocks of cotton as grower, ginner, textile mill or exporter.

During the financial year 2001-2002, he said, cotton prices had witnessed wide fluctuations — going up from Rs1,525 (ex-gin per 37.32 kg) as on Oct 6, 2001 to Rs2,175 on Nov 21, 2001, and going down to Rs1,550 as on Feb 4, 2002.

Zahid Bashir said a reasonable stability in prices of cotton would benefit all sections of the cotton trade.

It promotes production and trading and helps efficient marketing of the cotton crop both at home and board, he added.

According to the Pakistan Cotton Ginners Association (PCGA) the unsold stocks of cotton lying in the ginneries as on Jan 15, 2002 were 2.06 million bales.

As per market reports, the unsold stocks of cotton are still higher as arrivals of cotton in ginneries are coming in. This has created serious liquidity problem for ginners and growers alike, he asserted.

The New York cotton futures, he said, had also shown wide fluctuations in prices of cotton during the current fiscal year for a variety of reasons. However, with the availability of hedge cover at the New York cotton exchange, Zahid

Bashir said, the risk of price fluctuations was covered, protecting the interest of the cotton trade.

However, the non-availability of hedging facility in cotton trade has badly affected stakeholders, he maintained.