A meeting of the members of Karachi Cotton Broker's Forum and members of Broker's Advisory Committee was held on Monday at the Karachi Cotton Exchange Building Trading hall. Presiding over the meeting, Naseem Usman and other members discussed various points and decided to send suggestions for new cotton policy and the federal budget for the year 2012-13.
In the meeting, focused on the free trading in cotton, they said that it should be continued which protect the interests of all the stakeholders including the growers, since Pakistan is one of the major buyers of Indian cotton, so to promote the interest of trade. More & more entry points on the Pakistan India border should be established for smooth flow of cotton.
They hope that government will try its best to implement the proposals as early as possible. The government is requested to include below proposals in the Cotton policy and the federal budget which is expected to be announced on May 25: To re-open hedge contract of Raw Cotton in Karachi Cotton Association (KCA), the government has already accorded its approval on 24-C3-05 for the commencement of cotton futures trading under the Karachi Cotton KCA. The Securities and Exchange Commission of Pakistan (SECP), ex Chairman Razi Ur Rehman stated in the All Pakistan Textile Mills Association (APTMA) meeting held on the 28th February 2008 in Lahore that hedge trading contract of lint cotton should be resumed.
So we all request the government to ensure the resumption of cotton futures trading at the earliest. In the absence of hedge trading cotton market has seen wild and wide fluctuations in price, which resulted in defaults in local and also in export trade. The KCA has already adopted a revised pricing mechanism and up to date rules and regulations based on cotton grading and standardisation, latest procedures which would further promote efficient marketing once futures trading in cotton starts, as at that time most of the cotton would be channelled through KCA which has also included adequate safeguards to ensure performance of contracts.
The cotton brokers believe that the government under the leader ship Asif Ali Zardari and Prime Minister Syed Yusaf Raza Gilani will go a long way to normalise the cotton market. It will also give employment to thousands of workers in the cotton trade. Moreover, the cotton futures market will stabilise the cotton price and reduce the price fluctuations in the market.
Chairman of SECP Muhammad Ali granted permission to the Pakistan mercantile exchange limited for introduction of future trading in cotton instead of Karachi Cotton Association. Which is unfair decision because the KCA is most qualified with proper expertise. In international cotton regulating and running the cotton future trading experience of many decades.
Naseem Usman Chairman of Cotton Brokers Forum has expressed his concern over the decision of the SECP for granting permission to the Pakistan Mercantile Exchange Limited for introduction of futures trading in cotton. He also expressed his concern that futures trading in cotton as allowed by the SECP at the PMEX does not involve physical delivery of cotton which is a serious shortcoming.
Naseem Usman urged upon the government to order to allow the KCA to manage the Cotton Futures Marker the suspension of notification issued for introduction of Futures Trading in Cotton at the PMEX in order to discourage speculations, gambling and voyeurism in the Cotton Market and safeguard the interest of cotton economy as well as national interest.
Naseem Usman urged upon the government to suspend the Notification issued for introduction of futures trading in PMEX and emphasised allow the KCA to resume Hedge Trading in Cotton Exchange under aegis of the KCA as it full infrastructure, Comprehensive by-laws, skilled and experienced man power, 320 cotton brokers dully registered with the KCA to run Hedge Trading in cotton effectively and smoothly.-PR
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