Cotton prices: Textile mill owners accused of creating panic in market

RECORDER REPORT

MULTAN: Pakistan Cotton Ginners Association (PCGA)’s chairman Hamesh Kumar has said that The Competition Commission of Pakistan (CCP) and Monopoly Control Authority (MCA) should take notice of the cartel of Textile mill owners to create panic in the local market to bring down cotton prices to stock cheaper raw material through cartelisation and giving wrong reports of importing cotton from China and India. Ginners should not lend ear to negative rumours, which may cause huge losses.

In a press statement issued here on Saturday, Hamesh Kumar said that one of the textile sectors is trying to create panic in the local cotton market to exploit the situation.

The PCGA chairman was of the view that only 10 to 12 big textile groups hoard raw cotton at lower rates. Later they create a monopoly on yarn and blackmail the whole local market in the country. He urged the Textile Ministry to regulate the entire market, starting from cotton seed to cotton yarn.

He stressed the need for organising a forum of all stakeholders to safeguard the interests of all. He said a ‘textile mafia’ was making huge profits at the cost of growers by hoarding the produce and later selling it at high prices, asking the government to stop unchecked export of cotton yarn in the nation’s best interest.

He pointed out that big players were projecting wrong production figures, cotton rates and world cotton scenario as per their interests just to create panic in the local market, which was happening under the government’s nose, which remains a silent spectator.

The PCGA submitted a report to the Federal Secretary Textile industry Shahid Rashid and asked him to take necessary measures. In his reponse, the Secretary said that the Korean Government has agreed to provide a grant of $ 5 million for a cotton research centre, which would be established in the National Textile University.

He said that Pakistan would be able to attain the status of GSP in the European Union in 2014 and it would make progress by leaps and bounds after getting duty-free access to the markets of the European Union. He said that access to the EU would be beneficial for the textile sector because 64 out of the total 75 approved items belonged to the textile sector.

He disclosed that the ministry of Textile had prepared a draft of the National Cotton Policy and it was sent to the all stake holders seeking their suggestions. After the approval of all the stake holders, it would be sent to the federal cabinet for approval before announcing it.

He said that a model trading house would be established in Multan, while necessary arrangements were being made for the establishment of cotton ginning, a training institute in Multan. Funds have been released for this institute, he added. The Secretary urged upon the ginners to prepare the cotton bales of 170 kgs because it was the approved standard for cotton bales.

He said that the option for the arrival of a Trading corporation of Pakistan as an alternate buyer existed. However, this step would be taken with the consent of all stakeholders. He said that the prices of raw-cotton and ginned cotton were improving day by day.

He dispelled this impression that the Crop Assessment Committee’s production report caused the increase of cotton price in the market because it had predicted less production than the target fixed by the Government, particularly in the Punjab.

He said that the government would not take any steps at the cost of farmers and it would take action in the farmer’s larger interests. He gave the assurance that every possible step would be taken to safeguard the interests of growers. He gave the assurance of soft bank loans, rehabilitation of farmers/ginners of rain-hit areas of Punjab and Sindh and compensation for the affectees.

He said that the ginning industry was the backbone of the country’s economy. The secretary said that the Textile ministry was planning for the upgradation of the ginning industry and said that it was developing a technology, upgradation, infra-structure development and textile promotion fund.

We are also doing experiments on the textile city and garments city besides the promotion of the value addition sector. He disclosed that a research centre was being established in the National Textile university with the financial assistance of Korea, which had provided a grant of $5 million for this project. He said that the drawback of local taxes, mark-up support scheme and facility of working capital was being extended to ginners.