950812

'Hedge trading

in cotton will

provide price

risk cover'

RECORDER REPORT

KARACHI: The Chairman Karachi Cotton Brokers Association, Mohammad Hanif Maniar, has urged the government to allow hedge trading from the commencement of 1995-96 crop season, September 1.

In a press statement on Saturday, he said that hedge trading in cotton was essential for conducting smooth national and international trade, as it provides risk cover from price fluctuations to all sectors of trade and brings stability to the market.

He said that hedge trading is already in operation for commodities such as cotton seed oilcakes, stocks and currencies and could also work in cotton trade without any difficulty. Those who have apprehensions regarding religious aspects of hedge trading could refrain from it as it will not be compulsory for traders to enter the hedge market, he added.

"Apart from other benefits, the opening of hedge market would generate employment for at least 1500 persons including brokers, commission agents and their staff", Maniar said.

The secretary of the association, Naseem Usman, said that during the last two weeks a severe upsurge of Rs 100/- per maund was witnessed in the market which resulted in cancellation of deals, disputes and complications.

He was of the view that hedge trading in cotton would be an effective means to bring price stability in the market.