KARACHI:Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has appreciated PM Imran Khan for removing 5% regulatory duty on import of cotton yarn on FPCCI’s recommendation.
“The decision of the withdrawal of 5% regulatory duty on the import of cotton yarn will greatly support the textile sector of Pakistan and will contribute to the economic stability of the country,” said Mian Anjum Nisar, President FPCCI.
He said FPCCI has pointed out that country has not been able to achieve its full export potential in the textile sector and product diversification. It is due to limited access to raw-material. The regulatory duty on cotton yarn should be terminated so that exporters could be able to achieve price competitiveness and product diversification.
According to FPCCI chief, local production of cotton is not sufficient to meet the demand of the textile industry while Pakistan is receiving huge orders. Cotton was not available at competitive prices due to the regulatory duty and hectic procedures, and the COVID-19 outbreak and the lockdown in recent past have also worsened the situation.
The second wave of COVID-19 is also a serious threat to textile productivity. The cotton crop was severely damaged due to torrential rainfalls last year. It is estimated that the cotton production was in the range of 6 to 8 million bales against the local textile sector’s requirement of 15 to 16 million bales.
According to the data up to December 1, 2020, reported by Pakistan Cotton Ginners’ Association 4.6 million bales of cotton arrived in the industry while the figures of last year was 7.4 million, in the same manner, the unsold stock of this year is 0.9 million bales while last year it was 1.4 million. The data shows that cotton crop yield has declined by almost 13 percent, which is the major cash crop that could contribute significantly to the development and economic prosperity of the country.
Due to multiple factors the cotton under cultivation area and production declined significantly, as torrential rains hit the fields, COVID-19 impact and many of the growers shifted from cotton to sugarcane and maize so its output slashed from 15-16 million bales to 6-8 million bales. Major reasons for low production are reduction in yield per acre, low priority to grow cotton, uncertified seeds, and pesticides, etc.
He said that in the country there is a gap of five million bales in production and domestic consumption. The local textile industry is, therefore, compelled to import raw cotton from abroad to meet its requirement of basic raw material and to ensure its contribution to Pakistan’s export.
FPCCI has organized a conference on cotton to highlight issues and suitable solutions to make the country self-sufficient in this precious raw material.
Though the area of cotton under cultivation was standing at 2.9 million hectares in 2015-16 which was now reduced to 2.3 million hectares so over 0.5 million hectares of cultivation decreased in the country. The FPCCI also urges the government to facilitate growers and offer incentives for cotton growers and bring back those growers who had opted for other profitable alternatives to the cultivation of cotton.
President FPCCI further said that because of importing cotton from abroad, the cost of the textile sector increased so this sector became uncompetitive compared to other countries.
On the behalf of all textile industry and FPCCI members, Anjum Nisar extended whole-hearted appreciation to the Prime Minister of Pakistan Imran Khan and his Government for the timely decision of removing the 5% regulatory duty on the import of cotton yarn.