Rs 95 billion loss feared due to lower cotton production
LAHORE: A decline of around 23 percent in the cotton production, mainly due to use of defective seed and lack of quality cotton research, would cause a loss of Rs 95 billion to the country besides losses in the supply chain of weaving, spinning as well as in Binola seed.
According to Pakistan Cotton Ginner’s Association (PCGA) statistics, mainly the loss is due to decease in cotton production in Punjab province, which is witnessing around 2,300 bales production lost from 6,985 last year to 4,654 bales. However, Sindh cotton remained almost similar to the previous year with a minor decrease from 3,452 to 3,366 bales. Mills buying until November 15 was 3213 cotton bales as compared to last year’s 5,343 cotton bales in Punjab while in Sindh at stands at 2305 as compared to last year’s 2,420 cotton bales. While the current stock of cotton stands at 921 cotton bales with around 10 per cent increase.
In FY 2014-15 total arrival of the cotton was 14.90 million bales and this year total estimated arrival has been calculated 11 million reflecting a loss of 3.90 million (around 4 million). The values of 3.90MB is around Rs 95 billion (around $1 billion), which is a big loss under the prevailing circumstances. This loss excluded Binola production loss. On the average Binola cost remains around one-third of the cotton price, and the loss may be calculated at Rs 32 billion. All Pakistan Textile Mills Association (APTMA) Punjab Chairman Aamir Fayyaz has said that the failure of cotton crop in Punjab would worsen the textile industry crisis in Pakistan.
He said actually there is a decline of 40 percent in cotton arrival in Punjab. “Cotton arrival up to December 1 has dropped to just 5.1 million bales against 8.5 million bales last year in Punjab, a decline of 40 percent,” he said. “It is failure of the cotton research institution run be government, which have become ineffective and a burden on industry. All demands to revive them have been falling on the deaf ears of the policy makers, resultantly, the collapse of cotton crop” he said, adding that “already 40 percent of the production capacity in spinning, weaving and processing sectors has become redundant due to the high cost of energy”, he deplored.
“The growth indicators of textile industry are in the red zone and some 200,000 jobs have already been lost in basic textile during the last two years in Punjab,” he added. The government is blaming climate change and rains and floods for decrease in cotton production in Punjab, however, cotton experts said that there was almost no decrease in Sindh, which also faced rains and floods alongside Rive Indus this year.
Textile mill owners and association office bearers, three years ago, submitted a proposal under the leadership of Gohar Ejaz to the textile ministry, cotton commissioner and Pakistan Central Cotton Committee for overhauling the cotton research organisation by taking APTMA and other stakeholders onboard properly and making it at a par with the required standards.
It was also suggested to increase cess from Rs 20 to Rs 50/cotton bale and spend the same money on research. The agreed and increased the cess amount from Rs 20 to 50 earning Rs 700 million from cess/year from the last three years. However, despite if increase in finance the cotton research is on the decline and seriously affected cotton production in Pakistan, said Anisul Haq Aptma spokesman.
He said normally there is 2-3 percent cotton imports in Pakistan, however, due to decline in local production, this year’s imports from India, West America and Turkmenistan are expected to increase. Anis said the government, textile ministry must reconsider their proposal regarding cotton research, while saying that Pakistan was reducing its biggest export instead on taking advantage form the GSP plus status in the European Union.