1st January till 30th June 2020: SBP urged to waive off mark-up of ginning sector

Pakistan Cotton Ginners Association (PCGA) has appealed to the Governor State Bank of Pakistan to waive up the mark-up of the ginning sector of first two quarters (1st January till 30th June 2020) to minimize the effects of Covid-19.

In a letter written to governor SBP Reza Baqir by PCGA Chairman Mian M Javed Sohail Rehmani said if the markup was waived off it would bring the cotton ginners in a position where they would be financially stable to procure the seed cotton for upcoming cotton season 2020-21 from farmers.

"It will help to improve the future cotton production in Pakistan which will increase our exports and reduce our trade deficit," letter said.

Rehmani said that cotton and cotton seed oil cake which was still lying in cotton ginning factories had not found any buyer in the market. Also, there has not been any transaction of cotton in the market. Instead, cotton ginners who disposed of their cotton during previous months are struggling to recover due payments, on the other hand, banks are demanding first quarter mark-up.

He also said that ginners could only be in the position to pay the mark-up once their unsold stock was sold out and they can also recover their previous payment from the spinning sector.

"We are the basic raw material supplier of the textile industry and similarly the only buyer of Seed cotton (Phutti) from farmers. You are well aware of the fact that most of the exports sector of the textile industry has been greatly disturbed in recent past, consequently, the spinning sector has closed down their operation who is the only buyer of ginned cotton," the letter said.