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Cotton Surveys Related Information.

Byline: Qayyum Pervez Malik

In any ginning and pressing factory the cotton is present in the following forms.

1. Un-ginned cotton which contains cotton seed. It is also termed as Phutty" or Kappas"

2. Ginned cotton which is cotton from which cotton seed is removed by ginning process.

Approximately 35% (with 10% variation) ginned cotton is separated from un-ginned cotton during ginning process. It is termed as Ruee or ginned cotton in local language and present in the factory in form of cotton bales.

3. Cotton waste. 3-4 % cotton is wasted during ginning process which is collected in an adjacent room. It is called ginning process waste.

Large number of verities of cotton is grown in Pakistan. But since neither the factory record nor the stacking of cotton is maintained on that basis so this aspect has no importance as far as cotton underwriting or survey is concerned.

Except above 3 forms of cotton seed is also present. It is separated from un- ginned cotton during ginning process.

The ginning turnover is usually taken in the range of 35% cotton 4% waste and 61% seed (with 10% variation). The usual standard moisture percentage in ginned cotton is maintained at 9%.

Ginning turn over keeps on changing throughout the ginning season depending on many factors like temperature moisture ginning conditions quality of ginning machines variety of cotton and weather conditions etc.

Since the weight of each and every heap of un-ginned cotton is available so weight record is maintained after completing ginning process of every such heap as to how much ginned cotton seed and waste was recovered on completion of each cotton heap. Seed is weighed when filled in bags for sale or during dispatch for sale or feeding to oil mill for crushing.

Ginned cotton is also weighed initially when it is pressed in cotton bales when each and every cotton bale is weighed.

The un-ginned cotton is stored normally on platforms which are termed as tharra" in local languages. Platforms are constructed with burnt bricks on the floor higher than the floor level to store un-ginned cotton. This is done to save the stock from water logging/rain water etc.

Un-ginned cotton is stored on these platforms in form of heaps. These heaps are termed as Darra" in local language. Un-ginned cotton is received by the cotton ginners in various forms.

1. In jute bags called bora.

2. In tractor trolleys.

3. In trucks.

4. On camel's back packed in boras.

Either it is purchased through commission agents or directly from the farmers. Weight is taken at every stage by the farmers by the commission agents on loading and unloading of cotton. On entering in the ginning factory it is weighed again. Currently almost all the ginning factories are equipped with large electronic weighing bridges/scales for that purpose.

A gate register is maintained to record each and every carrier of un-ginned cotton on arrival and ginned cotton/cotton seed on exit. Weight register is maintained to record the gross and net weights. Another register is maintained to record weight after deducting extra moisture and impurities/foreign material as well which is termed as Katla register". The last and final weight register is termed as excise or xx register" which is official register to record final weight of un-ginned cotton purchased by the ginning factory against which cotton cess is paid to the Government. It is maintained date- wise.

Two types of stocks of un-ginned cotton are kept in the factories. One consisting of stock which has been purchased by settling all terms of purchase i.e. rate weight impurities moisture and final weight etc. 2nd type of stock is consisting of stock which is lying un-settled with the seller. Both the stocks stand as insured by the standard fire policy.

One more register is maintained which is termed as darra register (heap register) in which weight of each heap formed in the open compound on the platforms or floor in case the platforms are short of storage capacity to accommodate more cotton is recorded.

Surveyors may verify the weight of each heap through this register. Overall weight of un-ginned cotton lying in the factory can however

be verified by gate incoming register weight register katla register excise or xx register etc.

Professionally competent and experienced surveyors however may go through the physical verification procedure by measuring the heaps with formulas as established with in the fraternity. These formulas are not scientifically or theoretically established however. The quantum of stock of loose un-ginned cotton in open compound can be assessed by experienced surveyors with very low margin of error. These formulas can never be taught to others but can only be learnt by practice.

Un-ginned cotton heaps are not formed in any geometrical shape so the surveyor has to assign an imaginary geometrical shape of rectangular prism to each heap by cutting down the side edges and peak of heaps. Volume is then determined by multiplication of length width and height. Then the compactness of each and every heap which is obviously different to others is determined the accuracy of which is also dependent on the experience/expertise of surveyor. On correctly determining the compactness of heap/stock of un- ginned cotton the factor to determine weight per unit area is determined. Determining this factor can also be learnt through experience and cannot be taught theoretically. This factor varies from 6 to 12 cubic feet per mound. With minor variation in determining density factor the weight of whole stock of un-ginned cotton lying in the factory can be either increased or decreased by thousand of mounds.

Stock of Ginned cotton on the other hand is kept in form of cotton bales. Weight of cotton bales is recorded in pressing register. Weight can also be verified by physically weight of bales randomly. Another record for verification of weight of bales is weight notes and sale bill where net weight is available. Weight of cotton bales are firstly recorded when bale leave the press house for stacking in open compound and 2ndly when it is loaded on vehicle for transportation. It is again weighed when delivered at the premises of purchaser i.e. spinning or textile mills. The standard weight of a bale is however 170 kilograms with variation of 3%. Usually the average weight of a lot consisting of 100 bales is being maintained at 16000 kilograms net currently.

In case of fire origination in un-ginned cotton heap by any accidental / fortuitous means it affect the cotton heap superficially only. The upper layer of the heap is only affected directly by fire/heat. Due to penetration of water used to fight fire however affect the seed up to some extent. If the affected heap is opened up and dried after removing affected crust the loss by water could be eliminated.

Loss is assessed by dividing the heap in 3 main categories. Category 1 consists of black crust formed by total loss of upper layer of cotton. Category 2 consists of heated cotton which is discolored due to heat etc and category 3 consists of cotton which is affected by water. Remaining stock of heap remains almost sound. Some times when the affected heap is affected severely or it is not opened up for 2-3 days or the temperature is high then the extent of damage aggravates in bottom layers of affected cotton heap. On digging/cutting a lane through the affected heap the inner core of the heap can be examined to assess the extent of loss.

Un-ginned cotton lying in form of big heaps can never be converted to total loss. The so far highest percentage of loss in un-ginned cotton remained with 35% in any one stock of un- ginned cotton lying in form of a heap. However if the stock of un-ginned cotton is kept in very low height like 1-3 feet then the percentage of loss may touch to almost total loss. It occurs when the stock of each and every small carrier like bull cart camel back cart small tractor trolleys etc are stored in open compound separately forming multiple small heaps. These heaps normally do not maintain any distances in between. Percentage of loss would go on decreasing with the increasing height of heap of un-ginned cotton.

Naturally the stock of un-ginned cotton do not aggressively lose its volume after burning so the residue of burnt un-ginned cotton can be measured and volume can be assessed by adding up margin of decreasing in size due to fire/water again by the skill an experienced surveyor attains after lengthy practicall experience.

Relevant record as mentioned above may also be taken in to account to assess the quantum of involved/un- involved cotton. The mortgagee's bank record may also be checked for further verification.

So to quantify the stock of un-ginned cotton lying in the factory following record may be checked other than following the procedure of assessment by physical methods as mentioned above.

1. Un-ginned cotton inward gate register.

2. Un-ginned cotton weight register.

3. Katla register.

4. xx or excise register which is duly examined and signed by excise inspector.

5. Commission account against purchase of un-ginned cotton.

6. Excise (cess) payment receipts against purchase of un-ginned cotton.

7. Weighing scale record.

8. Ledger against purchase of un- ginned cotton.

9. Heap register.

It can be assessed by various indirect methods which is advanced stage of assessment and may be discussed later. To assess the value at risk as well as extent of loss in term of amount the prevailing market value of affected item at the time and place of loss is taken in to account. The prevailing market value of un-ginned cotton can be obtained from the surrounding cotton factories market committee etc. Relevant record is also available in the factory in form of ledger purchase bills / receipts etc. People who are involved in cotton ginning / pressing business or surveyors / under writers keep themselves updated regarding fluctuation in cotton rates. Rate of ginned cotton are also available in the market. Record in form of ledger and sale bills and sales record is available. KCA spot rate for base grade 3 cotton is also available for reference. The authentic website to verify the spot rates of ginned cotton is

G.O.T of different verities of cotton is also charted down in the same website but it does not reflect the actual values on ground which are quite different.

Assessing loss in ginned/un-ginned cotton is very lengthy subject and cannot be covered in one article. These days the burnt stock of cotton bales are presented before different salvage corpses/dealers who examine and offer their value. The highest value is taken provided it is not contradicting to the value of loss as assessed by the surveyors. Role of an experienced/competent cotton claims surveyor is of prime importance because he is the official and expert to assess the correct extent of loss and to check the fairness of salvage value as being offered by salvage dealers.

In short it can be said that assessing extent of loss in cotton is task to be handled by experienced / skilled / competent cotton claims surveyor only. There is no any existing scientific formula to assess such losses. The loss is assessed by assessing the extent of physical damage to each and every cotton bale and heap. The affected cotton bales are categorized in to different categories on the basis of extent of loss by experienced surveyors. Various factors are taken in to consideration while assessing the extent of damage to cotton bales. Those are bales which damaged from all sides bales which are damaged from one side two sides three sides four sides etc. and penetration of fire in to the bales. Cotton bales if remain un-opened after fire get damage at very low extent as compared to bales which get opened after fire by breaking the tie hoops.

Similarly assessing the extent of loss in stock of un-ginned cotton is also task to be handled by experienced surveyors and cannot be taught theoretically because there is no scientific procedure or formula to determine the extent of involvement and loss.

In one of my previous articles I had suggested a practical procedure to modify the transport and stacking of un-ginned cotton which may be gone through in this respect. If that procedure is adopted the assessment of quantum of involved/un-involved cotton and assessing the extent of loss shall become easier and more accurate.

Some mischievous claimants manipulate the record and facts to draw undue benefit out of claim by showing excessive purchased of cotton. And sometimes cotton bales are removed out of factory in order to cover up the under insurance factor.

It can be identified easily by expert / experienced surveyors by checking the complete factory sale / purchase record and investigation conducted at site of loss. Bank record excise record 3rd parties record can be verified. For example if cotton bales are removed after fire to avoid under insurance one can inquire from factory labor outside / surrounding people i.e. shop keepers who would tell if any trailer or truck left the factory after fire. Weighing scale record bank delivery of orders record from various truck stands may unveil the facts. There are many other ways to identify this aspect. If quantum of cotton is increased by manipulating record one experienced surveyor may go and assess it by physical methods. Cotton bales claimed as total loss may also be verified by hundreds of ways. Only experienced surveyor may reach at fair conclusion.

A book of 1000 pages can be written on this topic so it cannot be closed in one article.

As mentioned above other than going through factory record to determine value at risk or to quantify the stock of cotton present or claimed to be present in the factory following bank record may also be examined for reference of comparison.

1. Daily stock report.

2. Pledge letters.

3. Pledge register.

4. Limit sanction advice.

5. Delivery orders of cotton bales.

6. Payment received against sale proceeds.

7. Insurance record.

8. Drawing power detail.

9. Special godown inspection audit reports.

10. Account statement of cash finance.

11. Macadam register.
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Publication:Insurance Journal
Date:Dec 31, 2014
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