Pakistan Cotton Forum (PCF) has opposed the SECP approval to Pakistan Mercantile Exchange Limited (PMEX) for the introduction futures trading in cotton. Chairman PCF Seth Muhammad Akbar has expressed serious concerns on restarting the cotton futures trading and termed it as anti-growers, anti-trade and anti-industry move by the vested interest elements.
He said the experiment of hedge trading in cotton proved a failure in the past and was banned in 1976 when a number of brokers defaulted and scores of investors were deprived of their money. He said it would give way to control of cotton market by a bunch of vested interest traders, manipulating prices and subsequent dangerous consequences for all concerned quarters.
He said the speculators and market manipulators have already crashed the New York Futures Market, causing huge losses to the cotton trade world over. According to him, the 95 percent of cotton production is consumed by the domestic textile industry. Therefore, it was imperative that the SECP should have taken all the stakeholders on board before granting any permission. Chairman PCF said the SECP decision may prove detrimental to the cotton economy of the country.
Seth Akbar said the cotton was already short for industry consumption in the country. He said that the decision of futures trading is already challenged before the Federal Sharia Court. Therefore, Chairman PCF has urged the SECP to consult all the stakeholders of cotton economy, on the production, trade and consumption ends before granting any such permission. In the meantime, he added, the approval granted to the PMEX should be withdrawn in the larger interest of agriculture industry and export.