The government is considering to sell half of the cotton from the stock of Trading Corporation of Pakistan to local textile millers, said sources in the ministry of commerce. It would be a vital decision for the textile millers who still want to buy cotton from the TCP despite heavy buying in the wake of record cotton production.
The sources said that the ministry of commerce has sent a proposal for the approval of Economic Co-ordination Committee (ECC) to sell the cotton holdings of the TCP.
The country has produced 13.7 million bales and might touch 14.5 million bales mark till next week as the arrival continues in the Punjab.
The TCP was brought in by the government to procure cotton and stabilise the prices in order to save the growers from sudden crash of prices.
"About 1.5 million bales have reached the TCP godowns and it would be 2 million by the end of the season," said TCP chairman Masood Alam Rizvi.
"Either the TCP would export the cotton or share its stocks with the local textile millers," said Rizvi. He added that since the cotton season is over farmers have no objection if cotton is sold to the local textile millers.
"If the cotton is sold to local textile millers growers would not suffer," the TCP chief said.
The textile millers have been asking the government to release the stock of the TCP to them and were ready to pay the international price.
A Chinese delegation is visiting Pakistan in search of good quality cotton as China has announced to import 8.5 million bales this year. The delegation also visited the TCP and held meetings.
"If the Chinese want to buy cotton they should either come through the tenders the TCP would float or should negotiate on the government level," said Masood Alam Rizvi, however, he did not know whether the Chinese had held any talks with the government in this regard.
Despite record production, the textile millers were still buying cotton as their consumption has increased by 50 percent in last four years.
"Our consumption is not less than 14 million bales. If the TCP exports the cotton, we will have to import and that would be more costly," said a textile miller.
The exporters have already booked 650,000 bales of cotton and shipped 550,000 bales. They expect to export at least one million bales.
"Despite good cotton crop the world-over, Pakistani cotton was attracting buyers," said a cotton exporter.
"There is 100 percent chance that the government would allow to sell 50 percent cotton to the local industry as the prices are good in the local market and growers have sold out their stocks," said the commerce ministry sources.