The Pakistani government plan to buy up to a million bales of cotton in a bid to stabilise cotton prices in the country.
Prime Minister Syed Yousef Raza Gilani has asked the finance ministry to release funds to buy 1 million cotton bales, which weigh up to 170m kg.
The government has also set Minimum Support Prices for raw cotton to help cotton farmers.
Amunullah Quresh, chairman of the Pakistan Cotton Ginners Association, told reporters that more than 2.2m bales are lying in ginning plants.
He also added that his organisation welcomed the government’s intervention because they cannot buy raw cotton from cotton farmers.
However, Mohsin Aziz, chairman of the All Pakistan Textile Mills Association, told the Dawn newspaper that the government’s move will lead to higher cotton costs and will make it difficult for the textile sector to compete in global markets.
He also added that interference from the public sector will bring end to 16 years of free trading in cotton.
Pakistan is currently the world’s fourth largest producer and third largest consumer of cotton.
