The Trading Corporation of Pakistan (TCP) has scrapped its fifth cotton tender. Not a single bidder submitted bids for procurement of the commodity mainly due to the 10 per cent advance tax. Although TCP’s cotton quality is better than the market’s, the imposition of advance tax restricted millers and traders from participating in the tender. There is no advance tax on cotton buying from the market. So, most traders are reluctant to buy cotton from the corporation.

In addition, offloading of cotton stocks at the time of arrival of the new crop created some challenges for the state-run grain trader. Domestic buyers or textile millers prefer to procure the new cotton crop instead of TCP’s stocks procured during the last season.

Out of five tenders, three were scrapped as bids were less than the reserve price. Some 10,800 cotton bales were offloaded through two tenders. Some 6,800 cotton bales were sold through the first cotton tender and some 4,000 cotton bales in the fourth cotton tender.

In order to stabilise cotton prices in the domestic market, the federal government a year back decided to procure cotton from ginning factories to support farmers and stabilise prices in the domestic market.

www.tcp.gov.pk/