A poor response from textile millers and traders forced the Trading Corporation of Pakistan (TCP) to issue multiple tenders for sale of cotton. Sources told Business Recorder Monday that after scrapping four tenders, the TCP has decided to invite fresh bids for sale of cotton. So far, the TCP has conducted six tenders to offload some 95,400 cotton bales and hardly it could sell some 10,800 bales through two tenders, while the remaining four tenders were scrapped due to less than reserves price quotation or no submission of bids.
"Despite giving all possible facilities to bidders, the TCP is facing difficulties in offloading cotton stocks as the federal government has imposed 10 percent advance tax on procurement of cotton from the corporation. Secondly, the TCP is seeking cotton rates as per market and refused to sell the commodity at lower than reserve price," they added.
They said TCP failed to attract the bidders; even it revealed the reserve price before opening of tender to guide the textile millers and traders. Sources said after scrapping four cotton tenders, the state run grain trader has decided to invite fresh bids to offload cotton stocks as any delay in sale of commodity will increase financial losses.
TCP's seventh cotton tender for sale of 84,600 cotton bales will be opened on October 13, 2015. According to the tender document interested parties can inspect cotton on October 12 at TCP's Pipri Godown and later a pre-bid conference will be held in the board room of the TCP office at 3:30 pm.
The TCP has also decided to reveal reserve price a day before the tender opening and accordingly the reserve price for sale of cotton will be posted on the TCP website on October 12 at 5 pm for guidance of interested bidders. The TCP has made it clear that no offer shall be entertained below the reserve price. The reserve price will be calculated on the average KCA spot rate October 3 to October 12, 2015 for base grade-III, staple length1-1/116". The premium shall be added in the average price for upper grade/staple length as per KCA premium rates applicable for the respective period, TCP mentioned in the cotton tender, it added.
A minimum 200 bales limit has been fixed for the bid and bidders will be required to submit pay order @ 5 percent of total value as bid earnest money (along with bid) in favour of the TCP. According to TCP, partial payment will not be allowed to successful bidders of up to 2,000 cotton bales; however successful bidder, who procured more than 2,000 bales, will be allowed partial payment in two equal instalments.
The TCP has made it clear that the interested parties, who have not fulfilled their earlier contractual obligation with TCP, will not be eligible to participate in the bids, unless they clear their dues along with penalties or fulfil their contractual obligations in services and commodities with TCP.
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