Cotton trading remains suspended on ginners strike

Tag : ginning cotton



Cotton trading remains suspended on ginners strike


By Our Staff Reporter

KARACHI, Aug 4: Physical trading on the cotton market on Mondayremained suspended as ginners vowed not to resume ginningoperations until their demands are met by the relevant authorities.

In a meeting held in Multan at the head office of Pakistan CottonGinners Association (PCGA) the ginners decided that they would keeptheir factories close until their demands about the renewal oflicenses and withdrawal of Rs5 per bale fee to be collected by theexcise department are accepted.

Some officials, however, said the fee is refundable at the end ofthe season but ginners claim it was not mentioned in the officialcircular, which means it has been levied as a tax along with anincrease of one per cent in the sales tax.

A fee or tax at the rate of Rs5 per bale is on the higher side,said a leading ginner, adding calculated at an average annualproduction of 10m bales, the total will run into millions ofrupees.

What is more disturbing is that the job of collection is entrustedto the excise department, which will open the floodgate ofcorruption and disputes on the number of bales turned out by aginnery and the tax amount, he added.

Out of 1,200 or odd ginning factories, about 50 to 60 of which hadresumed operations early last month have now shut their business tothe disadvantage of those spinners, who buy their lint intake ondaily basis owing to financial problems, floor brokers said.

They may have to shut down their business as the raw material isnot available, floor brokers said.

But some of the leading spinners and mills, whose stock positionsare comfortable, may continue their operations to meet theirforward export commitments both for cotton yarn and textiles, theysaid.

But they, too, are worried amid fear that there will be a pressureon supplies if the strike drags on as ginners claim it isindefinite until their demands are met.

Barring a deal of 200 bales, from a Burewala ginnery done late onSaturday at Rs4,250 per maund, ready business remained at astandstill on Monday.

Local ginners said there was no official word on their demand sofar and their strike will continue on Tuesday also if there is noofficial intervention.

In the absence of ready business, there was no change in theofficial spot rates, which were quoted unchanged at Rs4,250 permaund.