Trading Corporation of Pakistan (TCP) to issue multiple cotton tenders for the sale of the remaining quality of 88,600 cotton bales procured from domestic market, due to the lower participation in the first tender although the state-run grain trader has successfully sold some 6,800 cotton bales.
TCP issued first tender on July 16, 2015 for the sale of 95,400 cotton bales (crop year 2014-15), procured some six months back to support farmers and the domestic market. In response to the first cotton tender, opened on July 29, 2015, only three offers were submitted by local textile millers for the procurement of 7,000 cotton bales at price ranging from Rs 4,800 to Rs 4,900 per maund against the offered quantity of 95,400 cotton bales. As per the tender's terms and conditions, the offered price was linked with Karachi Cotton Association (KCA) spot rate from July 14 to July 28, 2015.
Out of three bids, one bid was declared non-responsive as the bidder failed to submit the bid money and relevant documents, while the offer was also lower than reserves price. The tender valuation committee and the award committee met on July 30, 2015 in Islamabad to look into the offers and finally decided to accept two responsive bids for sale of 6,800 cotton bales at a price of Rs 4,800 to Rs 4,900 per maund.
An official informed that some 4,400 bales have been sold at Rs 4,900 per maund, while another quantity of 2,400 bales (1.1/16 quality) has been offloaded at Rs 4,800 per maund. Talking about the price, the federal government has already pledged to pay price differential, therefore TCP has sold cotton bales at this price, which is lower than the procurement price.
TCP has issued another cotton tender to offload the remaining 88,600 cotton bales including 1,000 bales of super grade, 24,200 of grade-1, 62,400 of grade-2 and 1,000 cotton bales of grade-3 as participation was much lower than the offered quantity. They believe that it's the right time to offload the cotton stocks as presently there is higher demand in the market due to off season.
The second cotton tender will be opened on August 10, 2015 at TCP Head Office Karachi. According to TCP, the interested parties, who failed to fulfil their earlier contractual obligations with TCP, will not be eligible to participate in the bids, unless they clear their dues along with penalties or fulfil their contractual obligations in services and commodities with TCP, as the case may be settled before tender opening date. Furthermore, those firms against whom blacklisting procedure has been initiated by TCP will also not be eligible to participate in the tender. TCP has clarified that No bid will be accepted after 11 am on August 10, 2015.
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