The Trading Corporation of Pakistan (TCP) would suffer huge losses on the disposal of 95,700 bales of cotton procured last year on the directives of the Economic Coordination Committee (ECC) of the Cabinet, official sources said on Saturday.
The TCP, which is holding around 88,600 bales, had already disposed around 6,800 bales on inviting bids through tender on July 15, 2015 and were opened in Islamabad on July 29.
The bid opening witnessed a sole offer from Tata group at Rs4,800-4,900 per maund against the procurement price of Rs6,864 per maund.
Thus, the corporation suffered a loss of around Rs63 million on account of this deal, official sources said.
“The loss suffered would be even higher once storage and other costs are added,” sources said. The corporation has issued another tender for the disposal of 88,600 bales and it will be opened on August 10, 2015 in Karachi.
Cotton analysts believe that there was little hope for the TCP to get better price even in the next bidding.
“If the entire quantity of procured cotton is sold at the same bid offer of Rs4,800-4,900 per maund, it will fetch Rs2.07 billion against the procurement price of Rs2.96bn,” analysts said. The ECC in October last year directed the TCP to procure one million bales. However, after the procurement of 95,700 bales the government directed the corporation to stop, as the late decision for purchasing cotton was not benefiting the growers.
Published in Dawn, August 9th, 2015
