The export of cotton registered over 146 percent increase during 2004-05 compared to previous year. Total exports in the year stood at 0.538 million bales, against 0.218 million bales in 2003-04. Cotton trade sources said on Wednesday that the reason for rise in exports was the bumper cotton crop during the year and demand for short and medium staple cotton from certain countries.
The bumper crop of 14.3 million bales resulted in decline in import of cotton, which stood at 1.8 million bales, compared to over 2.3 million of previous year.
A former chairman of Karachi Cotton Association (KCA), Zahid Bashir on Tuesday welcomed the government policy of free export and import of cotton which, he said, would be beneficial for all players of the trade.
He, however, opposed export of raw cotton and said that when converted into value-added products it would fetch more money than raw cotton.
He favoured import of cotton, which is required for manufacturing high-value exportable products. Main sources of cotton import are USA, West Africa, Australia, Central Asian Republics (CIS) and Egypt. The imported cotton, which is contamination-free and of extra long staple, is needed by local textile exporters for making high quality products. The price of imported stuff is usually 10 percent higher than the domestic cotton, he added.
He said that the spinning industry in the West was closing down while spinning mills in Pakistan have been modernised with most advanced technology. Pakistan's spinning industry is the best today in the world and no country can compare with the quality of Pakistani yarn, which is fetching best price in world market.
Zahid, who is a leading cotton trader, said that those opposing the hedge market were unaware of the benefits of hedging which had been in vogue in the country up to 1976. Hedging guarantees mitigation of losses for all cotton players, he added.
He said that the condition of surplus cotton was not an essential requirement for opening the hedge market, as China has opened two more hedge markets after the successful experience of the first.
He said that ginners were opposing the idea because they fear that the it would stop intervention of Trading Corporation of Pakistan (TCP) in the market, which is a guaranteed buyer of their cotton.