KARACHI: The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has appreciated Prime Minister Imran Khan for considering the chamber’s recommendations by removing 5pc regulatory duty on the import of cotton yarn.
“The decision to withdraw 5pc regulatory duty on the import of cotton yarn will greatly support the country’s textile sector, besides contributing to economic stability,” said FPCCI President Mian Anjum Nisar in a statement on Monday.
The FPCCI had earlier pointed out that the country would not be able to achieve its textile export potential due to limited access to raw material. It had suggested the government to remove regulatory duty on cotton yarn so that exporters could be able to achieve price competitiveness and product diversification.
According to the FPCCI chief, local production of cotton was not sufficient to meet the demand of the textile industry, which was currently receiving huge orders. Cotton was not available at competitive prices due to the imposition of regulatory duty and hectic procedures, while Covid-19 outbreak and subsequent lockdowns had also worsened the situation, he informed.
As per the data released by the Pakistan Cotton Ginners’ Association, around 4.6 million bales of cotton arrived in the industry as on 1st Dec 2020, as against 7.4 million on 1st Dec 2019. The unsold stock of this year is 0.9 million bales as compared to last year’s 1.4 million.
The significant decline cotton cultivation area and production could be attributed to multiple factors, including torrential rains, Covid impact and growers shifting from cotton to sugarcane and maize crops.
As per the chamber, main reasons for low cotton production were reduction in per acre yield, lack of interest in cotton crop, uncertified seeds, pesticides etc.
Anjum noted that there was a gap of five million bales between production and domestic consumption in the country. “The local textile industry is, therefore, compelled to import raw cotton from abroad to meet its requirement and ensure its contribution to Pakistan’s exports.”
It may be noted that the cotton cultivation area stood at 2.9 million hectares in 2015-16, which was now reduced to 2.3 million hectares. The FPCCI has urged the government to incentivise cotton growers and bring back those farmers who had opted for other profitable crops.