KARACHI: Pakistan’s textile exporters demanded duty-free import of cotton in a news conference here on Tuesday, pointing to the fact that the country was expected to suffer a shortage of the commodity by about six million bales that were likely to trigger a significant decline in its textile exports.
Cotton has always been viewed as a cash crop in Pakistan, but its yield has progressively declined in the last couple of years due to climate change, the use of uncertified pesticides and low-quality seeds. As a result, the country’s cotton crop suffered by 21 percent to 6.1 million bales as compared to 7.7 million bales produced in the same period during the last year FY19.
Pakistan has set a target of 15 million bales for the current fiscal year from a cultivated area of 2.895 million hectares in 2019-20.
“Almost 70 percent of cotton has arrived at ginning factories and we expect that the final output will only be 9 million bales for the current season. This implies a shortfall of 6 million bales,” Chairman of All Pakistan Textile Mills Association (APTMA) Dr. Amanullah Kassim Machiyara said at a news conference in Karachi.
Cotton is the main input of Pakistan’s textile sector that contributes almost 60 percent of the total exports of the country. During the last fiscal year, the country’s total exports stood at $22.98 billion out of which textile groups contributed $13.33 billion as compared to $13.52 billion recorded in the year before, according to the Pakistan Bureau of Statistics.
Exporters point out that Pakistani cotton has become costlier due to the imposition of duty and tax. Stakeholders say they are paying 10 percent duties and taxes on the import of cotton as well, making textile products uncompetitive in the international market.
“After payment of heavy duties and taxes imposed on cotton import, the cost of the basic raw material of the textile industry considerably increases, making the local textile industry uncompetitive in the international market,” Khawaja M. Zubair, Chairman of Karachi Cotton Association (KCA), said.
“The export of value-added cotton products and foreign exchange earnings of the country are being badly affected,” he added.
The stakeholders asked the government to urgently take steps to address the basic issues of cotton-producing areas, including encroachments on cotton fields.
“The government will have to take measures to provide certified cotton seeds because there is no other option. Apart from that, about 700 pesticide companies are operating in the country. These must be reduced to 70 or 80 after verification. The farmers are also suffering due to low productivity,” the APTMA chairman observed.
Textile players also asked the government to allow duty-free import of all types of cotton.
“If the country wants to impose a ban on the import of cotton from India, there are no problems since its relations are not good with the neighboring state. But the import should be allowed from other countries, including Africa,” Dr. Machiyara added.
The exporters also complained about the liquidity issue, pointing to the fact that their export refunds were stuck up with the government.
