Export sales contracts of raw cotton: KCA concerned at suspension of registration

The Karachi Cotton Association has expressed serious concern over the suspension of registration of export sales contracts of raw cotton by the Trade Development Authority of Pakistan (TDAP). According to the member-exporters of the KCA, the State Bank of Pakistan has suddenly discontinued accepting bank guarantees/security deposit relating to registration of export sales contracts of raw cotton wef 01-07-2012 in pursuance of instructions issued by the TDAP.
The TDAP has also arbitrarily discontinued registering export sales contracts of raw cotton wef 01-07-2012. Due to unjustified and illogical action of the TDAP, the exporters of raw cotton are not in a position to register their export sales contracts of raw cotton with the TDAP/submit bank guarantees/security deposit to the State Bank of Pakistan despite receiving firm orders from their foreign buyers.
The KCA said it understands that the export of cotton was being governed under the SRO No 767(1)/2009 dated 04-09-2009 issued by the Ministry of Commerce, Government of Pakistan, Islamabad and it is still valid. The new cotton crop 2012-13 has started arriving in the market both in Sindh and Punjab. If the government does not continue allow registering export sales contracts of raw cotton, it would be possible that foreign buyers, who are still keen to purchase raw cotton from Pakistan, might switch to other origins that would not only affect the interest of the country's economy by way of loss of foreign exchange but would also affect the interest of the cotton growers who would not be able to receive international price for their produce.
It may be realised by the government that in the cotton season 2011-12, the private sector cotton exporters had exported 1.7 million bales of raw cotton worth $433 million efficiently and effectively and played their positive role, being a second buyer, in stabilising the local market/local prices and safeguarding the interests of the cotton growers as well as in earning valuable foreign exchange for the country. By the Grace of Almighty Allah, cotton crop 2012-13 is progressing well and there are reports in the cotton circles that Pakistan might Insha-Allah harvest bumper crop in 2012-13.-PR