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Hedge trading in cotton opposed
MULTAN, April 13: Pakistan cotton ginners
association has urged the government to turn down
all efforts of some 'vested interests' who want to
reopen hedge trading in cotton market of the
country.
In a letter addressed to the president of Pakistan
and sent to all the concerned ministries and All
Pakistan textile mills association, PCGA chairman
Seth Jeth Anand claimed that hedge in cotton
trading would adversely affect all the three major
partners-growers, ginners and textile millers -of
cotton business in the country.
He said more than 90 per cent of the farmers in
the country had landholdings as small as under the
subsistence level of 12.5 acres. He said neither
the small growers nor the ginners could afford
market fluctuations as the result of speculative
buying.
"Hedge trading will increase financial woes of
both farmers and ginners besides affecting the
overall productivity in the cotton sector," he
asserted.
To further augment his disagreement to the hedge
trading, PCGA chairman said that the method was
only in vogue in the form of New York Futures (NYF)
in America while in rest of the cotton world it
could not prove successful.
He reminded that the NYF had yet to work because
America exported almost 60 per cent of its cotton
production. "While in Pakistan the spinning and
textile sector has to import more than 1m bales
every year as the domestic production could not
meet its demand of about 11.5m bales," he added.
Seth Anand said that despite all the trade
liberalization the cotton hedge trading in Mumbai
(India) had failed to click and thus it had to be
closed down. He expressed the hope that the
government would not allow hedge in the Islamic
republic of Pakistan for being based on gambling.
The DAWN
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Pakissan.com; Advisory Point
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