Support price of cotton at Rs 3,500 per 40kg recommended: summary moved to Prime Minister

The support price of cotton will be approved in the coming meeting of the Federal Cabinet for which the Food Ministry has already moved a summary to the Prime Minister, well-placed sources told Business Recorder here on Monday.
According to the sources, the government may fix the support price of cotton at Rs 3,500 per 40 kilograms to stabilise its prices in the domestic market. Sources said about 0.125 million bales of cotton were in the stocks of the ginning factories as the owners of the textile mills had reduced buying and selling cotton, lamenting that due to a sharp decline in the export orders by the foreign buyers, they were not in a position to buy cotton in the same quantity from the ginning factories like that of the last year.
On the other hand, delay in extension of the cash limits by the State Bank of Pakistan (SBP), the owners of the cotton ginning factories had stopped the payments of billions of rupees to the growers, said the sources. "If the situation remains the same next year, the country will have to face the shortage in the production of cotton as the growers are still waiting for their payments," sources said.
A senior official of the Trading Corporation of Pakistan (TCP) told this scribe that the government''s decision to start procurement of cotton through the TCP came on October 28, but the approval about the support price was getting delayed by each passing day.
"After this decision of the government about the procurement, the prices of cotton and phutti started increasing in the domestic market. The price of phutti has decreased from Rs 1,650 to Rs 1,400 per 40 kilograms, while cotton have declined from Rs 3,250 to Rs 3,050 per 40 kilograms", sources added.
They maintained that to adjust the support price of phutti according to the cost of production per acre of the grower, it should not be less than Rs 1,800 per 40 kilograms for phutti and Rs 3,500 per 40 kilograms for cotton. Pakistan Cotton Ginners'' Association Chairman Muhammad Akram Chaudhry told this scribe that according to the new arrival of cotton in the ginning factories, the country might achieve the production target of 14.11 million bales set for 2008-09.
"The country may achieve cotton production target set for this fiscal as the arrivals in the ginning factories have shown an increase of 24 percent over the last year," he said. He said that the cotton production in Sindh had increased per acre by 30-60 percent.