The Economic Co-ordination Committee (ECC) of the Cabinet has cancelled the tenders floated by Trading Corporation of Pakistan (TCP) for procurement of 100,000 bales cotton, official sources told Business Recorder. TCP had invited sealed offers for purchase of 100,000 bales of Pakistani raw cotton of 2008-09 crop in export worthy, six sides covered packing.
Minimum offer was to be made for 5,000 bales. Earlier, the corporation was asked to scrap its plan to procure 100,000 bales of contamination-free cotton, after the All Pakistan Textile Manufacturers Association (Aptma), a power lobby, persuaded the 'real' decision makers that the procurement plan would benefit only the middlemen.
TCP, in a corrigendum on January 22, 2009, stated that the words of 'clean cotton', appeared in its tender of January 1, 1009, be treated as deleted. Moreover, the opening date of the tender was extended from January 22 to January 27.
Sources said that the issue of cotton procurement came under discussion in the ECC meeting on January 27, which was presided over by Advisor to Prime Minister on Finance, Shaukat Tarin.
Aptma's well-wishers, sources said, pointed out that TCP's tender for procurement of 100,000 bales of cotton should be cancelled. The ECC endorsed it, they added.
Aptma had written letters to different ministries stating that procurement of 100,000 bales of contamination-free cotton by TCP was apparently an effort to increase cotton price in the local market, as there was no production of such cotton in Pakistan.
According to stated government policy, cotton import and export should be free of any barriers. Under this dispensation, domestic industry should get cotton at a rate which competes with exporters of cotton. The domestic rate, therefore, always corresponds to the international market.
One of the of textile experts told Business Recorder that there was no need of intervention in the market by TCP as prices had already reached Rs 3300 per maund, whereas TCP's support prices was Rs 3200 per maund.
"The prevalent price was not because of TCP's intervention, but due to New York cotton market where prices are relatively stable now," he said.
TCP, in its last corrigendum -2 has stated that the opening date of the said tender has been extended from 2nd February, 2009 to 26th February, 2009. The time, venue and other terms and conditions shall remain the same.
Another private sector expert told Business Recorder that the government should devise a mechanism which should help the farmers, both in Punjab and Sindh. He was of the view that the present system is only extending benefit to the middleman ie ginners, and not the growers.
TCP Chairman Saeed Khan was also present in the meeting when this decision was taken by the ECC. He, however, was not available for comments.
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