KARACHI: The Karachi Cotton Association has expressed its serious concern over the suspension of Registration of Export Sales 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 to accept Bank Guarantees/Security Deposit relating to Registration of Export Sales Contracts of Raw Cotton from them w.e.f 01-07-2012 in pursuance of instructions issued by the TDAP. However, the TDAP has also arbitrarily discontinued to register Export Sales Contracts of Raw Cotton w.e.f 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, says a KCA release.
The KCA 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, Govt. of Pakistan, Islamabad and it is still valid.
The new cotton crop 2012-13 has been started to arrive in the market both in Sindh and Punjab. If the government does not continue allow to register Export Sales Contracts of Raw Cotton, it would be possible that foreign buyers, who are still interested to purchase Raw Cotton from Pakistan, might switch over to other origins that would not only affect the interest of country's economy by way of loss of foreign exchange but it would also affect the interest of the cotton growers who would not be able to receive international price for their produce.
It may be realized 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 US$ 433 million efficiently and effectively and played their positive role, being a second buyer, in stabilizing the local market/local prices and safeguarding the interest 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 Inshallah harvest bumper crop in 2012-13.
In order to market the cotton crop abroad effectively and efficiently, it would be advisable for the government to continue allow the registration of Export Sales Contracts of Raw Cotton that would help to ensure presence of Pakistan Cotton in the international market, earn valuable, foreign exchange for the country and safeguard the interest of the cotton growers by providing them international price for their produce.
The KCA urged the government to issue necessary instructions to TDAP to continue allow registration of Export Sales Contracts of Raw Cotton relating to registration of Export Sales Contracts of Raw Cotton in the interest of the country's economy.
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