Pakistan Cotton Forum (PCF) has opposed the approval by SECP to Pakistan Mercantile Exchange Limited (PMEX) for introduction futures trading in cotton. PCF Chairman Muhammad Akbar has expressed serious concerns on restarting cotton futures trading in PMEX, 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 had 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 cotton trade the world over. According to him, 95 percent of cotton production is consumed by the domestic textile industry. Therefore, it was imperative that the SECP should have taken all stakeholders on board before granting any permission. The PCF Chairman said that SECP's decision may prove detrimental to the cotton economy of the country.
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