KCA welcomes resumption of hedge trading
KARACHI: Karachi Cotton Association (KCA) has welcomed government decision for resumption of hedge trading in raw Cotton. In a statement on Saturday, KCA said the hedging facility would lead to reduction in speculation in the market and help the participating sectors to better plan their operations. KCA pointed out that the association was operating the cotton hedge market effectively and efficiently from 1934 till 1976 when due to nationalization of various sectors of cotton economy in 1973, the necessity of hedge market declined. Pakistan has emerged as an important origin for cotton production and cotton consumption has also increased manifold during the last five years.
Due to vast stakes in cotton pricing the mitigation of risk has become essential to protect all the sectors of cotton economy such as growers, ginners, spinners and merchants. KCA expressed thanks to prime minister Shaukat Aziz, commerce minister Humayum Akhtar and other federal ministers for taking this bold decision and assured the government that the association possesses the necessary infrastructure for operating the hedge market and will also acquire the necessary operating system to start the hedge market operations soon. —APP