KARACHI: The local cotton market remained sluggish on Thursday. Market sources told that trading volume remained low.
A proposal of the Economic Coordination Committee (ECC) to import cotton yarn and sugar from India was rejected by the Federal Cabinet on Thursday. The summary was taken up in the cabinet meeting chaired by Prime Minister Imran Khan in Islamabad, hours after Minister for Human Rights Shireen Mazari said cabinet will review the ECC’s decisions related to trade with India.
Taking to Twitter, the minister had said it is only after the cabinet’s approval that the decision will be considered “approved by the government”.
“Just for the record — All ECC decisions have to be approved by cabinet & only then they can be seen as ‘approved by govt’! So today in the cabinet there will be a discussion on ECC decisions including trade with India and then the government decision will be taken! The media should be aware of this at least!” Mazari wrote in a tweet.
Yesterday, Federal Finance Minister Hammad Azhar had announced the government’s intention to import sugar and cotton from India. The decision was seen as an important milestone in the slowly warming ties between the two neighbouring countries.
The minister, in his first press conference since being given the finance portfolio, had spoken about the high prices of sugar in Pakistan, noting that the government had allowed sugar to be imported from other countries, but the price of the commodity in the supplier countries had risen considerably.
“However, in our neighbouring country India, the price of sugar is quite cheap,” he said. “Hence, we have decided to resume sugar trade with India”.
He had said the measure would help bring down sugar prices in Pakistan and provide relief to the poor.
Azhar had said the demand for cotton in Pakistan was also increasing and the country needed the commodity in a large amount. He said Pakistan had not produced quality cotton last year hence it had given the green signal for it to be imported from other countries around the globe.
“However, the import of cotton from India was banned and this had a direct effect on our SMEs,” he said.
“At the recommendation of the Ministry of Commerce, we have also decided to resume the trade of cotton with India,” he had said.
Earlier, All Pakistan Textile Mills Association (APTMA) Punjab Chairman Abdul Rahim Nasir Wednesday opposed the Economic Coordination Committee decision of allowing import of cotton yarn from India, saying that it would badly affect the exports of the industry as well as the investment scenario in the sector.
He said there is no shortage of cotton yarn in the country and it is sufficient available domestically, therefore, there is no need to let it import from India.
According to him, the prices of cotton yarn had spiralled up because of the fact that there was a shortage of 10 million bales of cotton within the country and the industry had no option but to import from abroad.
He apprehended that the local industry would be affected badly the rising trend of exports would get an adverse impact in a situation when new investment is underway and about 70 percent of the bank loans are being availed by the textile industry.
Also, he has termed the Economic Coordination Committee’s decision to allow the import of cotton too late.
He has also pointed out a contradiction in government policy of import by stating that the government has allowed the import of cotton on the one hand while ignoring a shortage of about 2000 tons of Polyester Staple Fibre in the country.
Cotton Analyst Naseem Usman told that Pakistan Yarn Merchants Association has rejected the decision of federal cabinet of not allowing cotton and cotton yarn from India. The Yarn Merchants Association leaders Hanif Lakhani and Farhan Ashraf raised serious concerns on the rejection of the proposal of import of cotton yarn from India.
They said that it is incomprehensible that first the Economic Coordination Committee has allowed the import of cotton yarn from India and then the federal cabinet opposes it.
The said that anti-industrial and anti-economy decisions were taken in a meeting chaired by Prime Minister Imran Khan. They also said that such type of decisions will be proved disastrous for the economy of the country.
They demanded that government should immediately allow import of cheap raw material from India. They showed their concerns that completion of export orders will be difficult for the textile industry if they don’t get the cheap raw material.
Pakistan Hosiery Manufacturers & Exporters Association (PHMA) zonal chairman Faisal Mehboob Sheikh and chief coordinator Adil Butt on Thursday asked the federal cabinet to allow import of low cost cotton and yarn from India through Wagha land route, as the ECC has already given its approval in this regard with a view to providing level-playing field to the value-added knitwear industry.
In a joint statement, PHMA leadership asked the Prime Minister of Pakistan Imran Khan and his team to take this bold decision which is vital for the smooth running of the industry.
Faisal Mehboob Sheikh said that the decision to lift the ban on import of cotton and yarn from India will greatly support the country’s value-added knitwear sector, besides contributing towards stabilizing the national economy through uplift in export.
He said that local production of cotton was not sufficient to meet the domestic demand of the textile Industry. Hence, the knitwear sector suggests the cabinet to allow duty-free import of yarn from India so that exporters could achieve their production targets.
He said that it was most crucial to allow import of cotton yarn from neighbouring country through Wagah border as the quality yarn is not available and prices are also multiplied to manifolds.
He demanded that the government to also abolish all duties and taxes on import of Cotton yarn from everywhere, as it is the raw material of value-added textile sector in order to sustain and achieve milestone in enhancement of exports.
Naseem also told that rate of cotton in Sindh was in between Rs 10,300 to Rs 11500 per maund. The rate of Phutti in Sindh is in between Rs 4500 to Rs 5100 per 40 kg. The rate of cotton in Punjab is at Rs 12500 per maund. The rate of Phutti in Punjab is in between RS 4800 to Rs 6300 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 12000 per maund. The rate of Phutti of Dalbadin Balochistan is available at Rs 6300 to Rs 6400 per 40 Kg. The Spot Rate remained unchanged at Rs 11500 per maund. The Polyester Fiber was available at Rs 220 per Kg.
Copyright Business Recorder, 2021