Investment in 40 ginning units

The Chairman of the Karachi Cotton Brokers Forum Naseem Usman while talking exclusively to Business Recorder revealed that around 3 billion rupees will be invested to set up 30 new ginning factories. This decision is premised on the fact that cotton output has risen to 15 million bales - a rise attributed to the floods of last year that raised soil moisture resulting in a bumper crop.
A ginning factory removes the seeds from the cotton and is the first step in the value-addition chain subsequent to the harvesting of the cotton crop. Thus if the objective of the 3 billion rupees investment is to support efforts towards higher value-addition of raw cotton domestically then it stands to reason that if the cotton output has risen then so would the need for more ginning factories. However, according to Pakistan Cotton Ginners Association (PCGA), our cotton is the best when in the field but one of the worst when sold to textile industry for cotton production. The reason: continuous decay of the ginning industry. Prior to the introduction of modern techniques for producing ginned cotton, referred to as cotton lint, handlooms were used on a wide scale in the Sub-continent. Although, improved lint producing gins were introduced to the industry in Pakistan, they are by and large, either imported after developed countries have scrapped them, or are copied from original designs. The machines currently in use are, therefore, not only more energy consuming and less efficient (with output also negatively affected by massive ongoing loadshedding) but also more prone to breakdowns and need constant expensive repair. PCGA also accuses the brokers of demanding too high a commission, a charge that would, without doubt, be challenged by the Karachi Cotton Brokers Forum.
Pakistan has over 1,221 ginning units installed with a capacity of more than one million bales on a single shift basis and a total capacity of around 20 million bales on a three-shift basis. However, much of this capacity goes to waste due to lack of cotton production (not the case this year) and expensive rates of imported low-grade cotton in the market. Additionally, the ginning industry operates seasonally, as our cotton industries do not promote good storage practices. A lack of warehousing leads to dust, cigarette filters and oily moisture being trapped in the cotton fibre which, in turn, leads to motes, and production of bad colour lint, which is then priced very low. Pakistan needs to improve its cotton picking techniques as well as its ginning machines since our international and regional competitors in these two fields are using machines for picking and more productive ginning machines while Pakistan is still relying on cost and labour-intensive hand picking and outdated ginning machines.
In marked contrast, however, India has deployed low capacity roller gins in its ginning sector. And has both new technology and skilled, institutionalised workers who produce, manage and market the lint. India has enhanced its ginning capacity so much so that it is now a major importer of cotton to produce lint. These factors have led to India beating the United States in becoming the second largest ginning country after China. There is thus a need for improvement in the ginning industry and while the State Bank of Pakistan's policy does provide for loans to the ginning industry yet other measures are required to enable the industry to effectively compete with India and China.