Commerce Minister Humayun Akhtar Khan has said the government will implement the Cabinet's decision on hedge trading in cotton business to stabilise market. He was talking to newsmen after a meeting with a high-level delegation of the Karachi Cotton Association (KCA) led by its Chairman Abdul Shakoor Dada on Wednesday evening. Trading Corporation of Pakistan (TCP) Chairman Syed Masood Alam Rizvi was also present on the occasion. The minister categorically said the federal Cabinet had allowed hedge trading in cotton and the KCA would regulate cotton hedge market. "The commerce ministry will issue the authorisation letter by next month to allow the KCA to handle this trade, said Humayun Akhtar.
It may be noted that federal Cabinet, in its meeting on March 24, 2005, had given the control of cotton hedge trading to the commerce ministry within the ambit of the Cotton Act, 1957.
To a question about the reservations of the Pakistan Cotton Ginners Association (PCGA), the minister said that all the stakeholders, including growers, ginners, and Aptma were the part of the committee constituted by the commerce ministry in April 2000, as this committee had finalised and recommended resumption of hedge trading in cotton.
Earlier, the KCA delegation consisting of prominent members, including Akbarali Hashwani, Maqbool Sadiq, Nadirshah Kabraji, Zahid Bashir, Sohail Naseem during a meeting vowed to support the government in its endeavour to implement hedge trading in cotton.KCA chief Shakoor Dada said that hedging facility of raw cotton would provide cover against the mitigation at price and helps stabilise the market.
He was of the opinion that hedge trading in cotton will reduce fluctuation in prices and was necessary for the proper conduct of national and international trade for efficient marketing of the cotton crop, and added that hedge market was purely optional.
Shakoor Dada said the KCA was working on a plan to resume hedge trading in cotton and improve infrastructure to handle this business, and pointed out that the KCA was effectively handling hedge market from 1934 to 1976 till the nationalisation in 1973.
Later, talking to newsmen at a local hotel before leaving for Colombo, Commerce Minister Humayun Akhtar said he was going there to operationalize free trade agreement (FTA) with Sri Lanka.
"Preferential trade agreement (PTA) has been finalised and I am going there to operationalize this agreement," he added.
"This is a major step towards enhancing bilateral trade between the two countries and it is better and more comprehensive than FTA between India and Sri Lanka," he observed.