The government's promise to buy 0.1 million bales of cotton carries no sense as the buying of old cotton stock would cause serious loss to the government while new crop cotton has no problem to sell, said cotton experts.
The ginners have about 350,000 bales of unsold stock and they are experiencing difficulty to sell this stock as the ginners had been asking for higher prices than actual prevailing value.
"If the government buys the old stocks of cotton, then it would be impossible for it to sell it either within or outside the country," said a cotton dealer in Karachi.
A delegation of Pakistan Cotton Ginners' Association, led by its Chairman Jethanand Kohistani, met the Finance Minister Shaukat and requested him to buy cotton. The Minster promised to buy 100,000 bales through Trading Corporation of Pakistan.
"We don't know which cotton the TCP would buy, as there is no movement for buying," said a ginner.
Most of the ginners were expecting that TCP would buy old stock cotton. However, cotton experts maintain that fine quality American cotton is available at Rs 2200 per maund (45 cents per pound). The new cotton crop is available at Rs 2300 per maund in Pakistan.
"If the TCP buys the old cotton at the rate of Rs 2300 or Rs 2200 per maund, it can not sell it in the world market and the government knows it," commented an expert on cotton trading.
The ginners who hold the unsold stocks are expecting that the government would buy their old stock at Rs 2500, or above, per maund.
"Buying old cotton is total loss for the government and buying new cotton by TCP is of no use," said the expert.
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