Cotton/yarn trade: foolproof mechanism essential to avoid hoarding, says Bilwani

Devising of a foolproof mechanism by the government is the only way to keep away hoarders and speculators who are out to disrupt and derail cotton and yarn trade, create artificial shortage of country's major raw material and basic requirement of value added textile sector which is vital for the nation's economy and foreign exchange earnings, stated M. Jawed Bilwani, Chairman, Pakistan Apparel Forum (PAF).
He proposed that the system should be so devised that only the spinners, ginners, value added textile exporters and local manufacturers are registered with Ministry of Textile (Mintex) and allowed to deal in cotton and yarn business.
Elaborating, he said if a registered value added textile exporter/local manufacturer purchases 500 bags of yarn from a registered spinner, the spinner would produce copy of this agreement to Mintex. This way, only authorised and registered spinners and ginners would deal in yarn and cotton and Mintex will have proper data of trading in cotton and cotton yarn.
Bilwani lamented that not only hoarders and speculators have been affecting cotton and yarn trade, but it has also been observed that some spinning companies have established their own trading companies to whom the yarn is sold to the detriment of their shareholders. It is imperative that the government devises a mechanism to check how many spinning mills have such trade companies, he stressed.
Due to the vicious grip of the hoarders on cotton and yarn trade, it is indeed an apathy that if a value added textile exporter has committed to his foreign buyer for goods for which 5,000 bags of yarn is urgently required and he goes to the market with cash in hand. Even then, the traders refuse to give him even 500 bags much to the detriment of the loss of precious export order.
PAF chairman pointed out that Pakistan's textile export is 54 percent of its total export and our economy is generated by textile exports while the employment generated is 42 percent. Should not the government therefore protect and save this sector from ultimate ruin, he questioned.
Bilwani further said India too is a signatory of WTO but for the sole purpose of protecting their foreign exchange earner and employment generator, value added textile export sector, it does not go with free trade regime and puts restrictions time to time on their exports of the lifeline of value added textile export sector. Further, as the global price of this commodity increased, Indian government, with imposition of restriction on its export, provided a chance to the exporters to back out of deals made at cheaper prices giving to their buyers, the genuine excuse of restriction by their government. Here, in Pakistan also in view of the rising global prices, the government can save the exporters from commitments made at cheaper prices, he asserted.-PR