The textile industry has estimated higher consumption of cotton this year to achieve projected growth. In terms of cotton production and consumption, 2004-05 has proved an extraordinary fiscal year for Pakistan. The arrival has surpassed all the previous records.
The textile industry has responded to the bumper cotton crop well by lifting 11 million bales by February 15 and for the same reason, it has demanded selling of the TCP's stocks in the local market.
However, the Minfal has divergent views on the subject. Its arguments are that selling of TCP's cotton stock to the local textile industry would certainly pull down prices in the local market and thus hurt the growers and ginners as picking and ginning was still continuing.
Sources said that Minfal has argued that the TCP cotton stock should only be sold in the market once picking comes to an end. The picking season continues till March 31.
The ministry added that TCP has been instrumental in keeping cotton rates at some reasonable level, which directly benefited the growers and ginners. It maintained that the change in government policy would bring the prices down considerably.
The TCP had launched an aggressive buying operation on the directive of the government. It's presence in cotton market as the second buyer served as a catalyst to keep the prices over and above support price. At present, the TCP has 1.6 million bales in its stock.
The TCP was brought in cotton market as buying agency to avoid repetition of the last year debacle when cotton prices had gone down putting the growers and ginners at loosing end. The policy of stablising prices in cotton market through the TCP intervention has worked up to the expectations of the authorities. The growers are getting attractive prices this time and so are the ginners.
It may be noted that lint prices are over Rs 2000 per 40 kg against Rs 1300 and Rs 1350 in the last season.
The growers are also getting over Rs 1000 per 40 kg of raw cotton (phutti) this year against last year's Rs 600.