Pakistan left with higher import of cotton

Amounts to $310m in 1HFY16 compared to $113m in 1HFY15

ISLAMABAD: Import of cotton has shown a sharp increase during the first half of the current fiscal year 2015-16, against the corresponding period of last year after a slump in domestic production.

According to latest figures, Pakistan’s cotton import jumped to 194,465 tons amounting to $310 million during July-December 2015 compared to 48,480 metric tons of cotton worth $113 million in the corresponding period last year.

Value-added sector opposes duty on yarn import

Similarly, textile and clothing exports declined by 8.93% to $6.269 billion during the first half of FY16 from $6.884 billion in the same period of last year. The fall was witnessed despite duty-free access to the European markets under the GSP Plus scheme.

Cotton production in the country declined 33% with a decrease of 44% in the largest cotton producing province Punjab alone.

According to officials, climate change; including heavy rains, pest attacks and harsh weather across the cotton growing areas are to blame for the slump in production, due to which the crop in most areas of southern Punjab was badly damaged.

“Most of the cotton imports by Pakistani traders are being sourced from India, which is facilitating its cotton farmers by offering duty drawback facility, interest rate concessions and infrastructure schemes,” said sources in the Ministry of Commerce.



Showing his concern, Council of Loom Owners Association Chairman Wahid Khalique Ramay said that yarn prices had increased significantly due to shortfall of cotton. “This has led to an increase in prices of cotton fabrics and garments.

“This will also affect the country’s value added textile exports,” he noted.

He further said that the costly raw material of textile products was a key hurdle in competing with the international market. “Such is not the case in India, Bangladesh and Thailand and this is why these countries are capturing Pakistani markets in the region and globally.

“Almost 20-25% of looms have been closed down, the ratio of unemployment has also risen,” he added.

Furthermore, Pakistan Cotton Ginners Association (PCGA) has expressed concerns over the situation and has opposed any proposal pertaining to the waiving off duty and tax on import of cotton from India.

“The cotton economy is passing through its worst crisis in history. We must support both the growers and small loom owners and avoid benefiting big cartels at the cost of the national economy,” said the association chairman Nawab Shehzad.



He said that regulatory duty, sales tax and customs duty on the import of cotton should not be withdrawn and it must continue for the survival of local farmers as well as ginners.

He said India has been a major beneficiary of duty-free import of cotton yarn by Pakistan for about four years. This has badly hit the domestic industry and agricultural sector of the country under a well-planned conspiracy.

He said that farmers are now switching to other crops due to the injustice meted out to them, which would have long term implications on the national economy.

Published in The Express Tribune, January 30^th,  2016.

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