A press release issued by KCA here on Saturday said that the State Bank of Pakistan has suddenly discontinued to accept Bank Guarantees/ Security Deposit relating to Registration of Export Sales Contracts of Raw Cotton from July 1,2012 in pursuance of instructions issued by the TDAP. However, the TDAP has also arbitrarily discontinued to register Export Sales Contracts of Raw Cotton from 1st July.
Due to unjustified and illogical action of the TDAP, the exporters of raw cotton are not in a position to register their Export Sales Contracts of raw cotton with the TDAP/ submit bank guarantees/ security deposit to the SBP despite receiving firm orders from their foreign buyers, it said.
The KCA understands that the exports of cotton was being governed under the SRO No. 767(1)/2009 dated 04-09-2009 issued by the Ministry of Commerce, and it is still valid.
The new cotton crop 2012-13 has been started to arrive in the market both in Sindh and Punjab. If the government does not continue allow to register Export Sales Contracts of raw cotton, it would be possible that foreign buyers, who are still interested to purchase raw cotton from Pakistan, might switch-over to other origins that would not only affect the interest of country's economy byway of loss of foreign exchange but it would also affect the interest of the cotton growers who would not be able to receive international price for their produce.
Cotton Crop 2012-13 is progressing well and there are reports in the cotton circles that Pakistan might harvest bumper crop in 2012-13.
In order to market the cotton crop abroad effectively and efficiently, it would advisable for the govt to continue allow the registration of Export Sales Contracts of Raw Cotton that would help to ensure presence of Pakistan cotton in the international market, earn valuable foreign exchange for the country and safeguard the interest of the cotton growers by providing them international price for their produce, it added.
The Association urged the authorities to issue instructions to continue allow Registration of Export sales Contracts of raw cotton and to the SBP to accept bank guarantees/security deposits from the exporters relating to Registration of Contracts of raw cotton in the interest of the country's economy.