KARACHI: The local cotton market remained stable on Monday. Market sources told that trading volume was low.
Cotton Analyst Naseem Usman told that Commerce Ministry is likely to convene a meeting of textile sector next week to prepare a comprehensive strategy to deal with gas moratorium approved by the government on January 21, 2021.
The textile sector, which contributes 60 percent to the country’s exports, argues that if there is discrimination in gas supply it will not accept it.
“Any plan must be implemented without exception. Captive generation costs 7 cents thus electricity tariff for export-oriented sector has to be rationalized at regionally competitive 7 cents otherwise we will be deprived of export market we have gained in the last year,” said one of the big players of textile sector.
Government maintains that the Captive Power Plants (CPPs) are inefficient and operate at 45 percent efficiency on LNG which is an expensive fuel.
He further noted that if industry has to get gas, it has to take it directly for the machine and not for engine/steam and cost should be at par across the country.
Meanwhile, Chairman Khyber Pakhtunkhwa Textile Mills Association (KPTMA), Salim Saifullah Khan has urged the Prime Minister of Pakistan Imran Khan to intervene and withdraw the decision of Cabinet Committee on Energy regarding discontinuation of natural gas supply to captive power generation for general industry from 1st February and the Export Oriented Sectors from 1st March 2021.
In a statement issued Salim Saifullah Khan said that the entire textile industries of Khyber Pakhtunkhwa is in a state of shock after learning this news item published in section of print media today. He said that such news and decisions of the Federal Government would sabotage the efforts and vision of Imran Khan, the Prime Minister of Pakistan for industrialization and boosting exports. He further said that the exporters have worked hard and achieve export orders for the year 2021. Such policies will put a deadly blow on the exports, foreign exchange earnings and the most labour intensive sector which has provided employment to over 46 percent of the labour force engaged in the manufacturing sector.
Chairman All Pakistan Cotton Power Looms Association Rana Azhar Waqar said that 15 percent increase in electricity tariffs would impose additional burden of billions of rupees on the people so this decision should be reversed. This decision will hurt economic activity and investor confidence. Instead of making electricity more expensive, efforts should have been made to reduce electricity theft and increase recovery.
Talking to the business community, Rana Azhar Waqar said that the condition of the people and the economy was not such that they could afford an increase of Rs 1.95 in the price of electricity as it would increase inflation by 2% while affecting industry and agriculture. The decision on production and exports will impose an additional burden of Rs 200 billion on consumers, in addition to the burden of sales tax, fuel adjustment and quarterly adjustment.
Meanwhile, the Central Executive Committee of Pakistan Cotton Ginnmers Association (PCGA) has demanded that sales tax and other taxes must be withdrawn for the survival of cotton growers so that they could get fair return of their produce. Another impediment in the way of fair-return was withholding tax on the sale of cotton because all these taxes are being paid farmers indirectly. Presiding over a meeting of CEC of PCGA its chairman Dr. Jassu Mal said that abolishing the withholding tax on cotton sale would help in creating alternate buyers to end the monopoly of the APTMA. He said that cotton control act must implement in letter and spirit besides adhering the crop zoning strategy.
He suggested that there should be open permission to import GMO and non-GMO seeds of cotton like seeds of vegetables, sun-flower, canola, maize, rice, potato and edible oil bearing crops. CEC demanded equal facilities to cotton ginners as were given to textile industry. PCGA’s CEC also demanded for allocation of funds of Rs.100 billion for the purchase of at least 2 million bales from the farmers at alternate buyer to maintain and stabilise the cotton rates. He suggested that interest-free loan be given to cotton growers besides providing certified, well germinated, heat resistant hybrid seed, cheaper electricity, original pesticides and other inputs, the prohibition of all crops in Core cotton areas strictly implement the Cotton Control Act(CCA).
He further proposed that the Support Price of raw-cotton (Phutti) must be announced immediately to bring maximum area under cotton crop but it should not be less than Rs.5000/- per maund. And a high powered cotton Control Board (CCB)headed by Prime Minister be constituted to resolve the problems of all stakeholders besides achieving the target of 20 million bales of cotton. He demanded the withdrawal of 10 % sales tax, withholding tax on the sale of cotton to attract alternate buyers. Dr.Jassu Mal said that a revolution can be brought in the cotton economy by spending huge funds equal to foreign exchange wasted on the import of cotton, sugar and wheat. He said that the anti-cotton lobby managed to get reject the summary of support price for Phutti twice. Now Prime Minister would have to use his influence and veto powers to save the cotton economy, he said
Naseem Usman told that 400 bales of Dherki were sold at Rs 11,000 per maund, 200 bales of GFhotki were sold at Rs 10,500 per maund, 600 bales of Mir Pur Mathelo were sold at Rs 10,500 per maund, 200 bales of Fort Abbas were sold at Rs 10,925 per maund, 400 bales of Faqeer Wali were sold at RS 10,500 per maund and 400 bales of Yazman Mandi were sold at Rs 10,500 per maund.
Naseem also told that rate of cotton in Sindh was in between Rs 10,000 to Rs 10,700 per maund. The rate of cotton in Punjab is in between Rs 10,200 to Rs 11000 per maund. He also told that Phutti of Sindh was sold in between Rs 3800 to Rs 5000 per 40 kg. The rate of Phutti in Punjab is in between Rs 4000 to Rs 5500 per 40 Kg.
The rate of Banola in Sindh was in between Rs 1600 to Rs 2000 while the price of Banola in Punjab was in between Rs 1800 to Rs 2250. The rate of cotton in Balochistan is Rs 10,000 per maund.
The Spot Rate remained unchanged at Rs 10,800 per maund. The rate of Polyester Fiber was increased by Rs 2 per kg and was available at Rs 193 per Kg.
Copyright Business Recorder, 2021