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Business Recorder
7 days ago
- Business
- Business Recorder
Weekly Cotton Review: Prices dip further as spot rate falls by Rs500 per maund
KARACHI: The downward trend in cotton prices persists, with the spot rate declining by Rs 500 per maund. Several ginning factories in Sindh and Punjab have partially resumed operations, with approximately 8,000 to 10,000 bales of cotton lint reaching ginning factories so far. However, the government has not announced any incentives for ginning factories in the budget, instead imposing an 18% sales tax on yarn imports—a move that has left ginners deeply disappointed. Ihsan-ul-Haq, Chairman of the Cotton Ginners Forum, stated that this decision is detrimental to the industry. Similarly, the Pakistan Cotton Ginners Association (PCGA) has also rejected the budget, calling it 'poisonous' for farmers and the ginning industry. According to Dr. Jesumal, Chairman of PCGA, the government has failed to take concrete steps to address the challenges facing the cotton sector. In Sindh, cotton is currently selling between Rs 16,000 to Rs. 16,500 per maund, while in Punjab, prices range from Rs 16,500 to Rs. 17,000 per maund. Phutti prices have been recorded between Rs. 7,800 to Rs. 8,800 per 40 kg. The federal budget lacks a clear strategy to boost cotton production. Sohail Talat, Chairman of the South Punjab Pakistan Business Forum, emphasized that the government must take effective measures to increase cotton output. He stated that a cohesive agricultural policy and financial support for research are essential for the sector's growth. Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood echoed these concerns, asserting that agricultural development is impossible without proper policy and research investments. In the local cotton market, several ginning factories in the provinces of Sindh and Punjab have partially resumed operations after the extended holidays of Eid-ul-Adha last week, while more factories are preparing to start. The supply of cotton has also been gradually increasing. In the budget, the Textile Sector and the Ginning Sector will see the elimination of the Export Facilitation Scheme (EFS) on the import of cotton and fabric, while ginners were hopeful that several taxes imposed on ginning would be abolished in the budget. However, the budget has only imposed an 18% sales tax on the import of yarn, although APTMA has appreciated these measures. Overall, the ginners have been greatly disappointed, as several taxes imposed on them remain unchanged. This disappointment among ginners will also have a negative impact on cotton growers, who are equally disheartened. The EFS facility is available for the import of cotton and fabric, which will have negative effects on local cotton because an 18% sales tax is imposed on local cotton. As a result, the cotton market will not be able to gain momentum, and this will impact cotton growers. If the price of cotton decreases, the price of cottonseed will also drop. Additionally, if the input costs for cotton growers remain high, there is a risk of reduced cotton cultivation. This year, large groups of mills have already signed a significant number of import contracts for cotton, which will result in relatively lower purchases of local cotton. As a consequence, ginners and cotton farmers will see reduced demand for cottonseed and lint, and they will also not receive fair prices. In the provinces of Sindh and Punjab, the price of cotton currently ranges between 16,000 to 17,000 rupees per maund, while Phutti (40 kg) is being traded at 7,800 to 8,800 rupees. The Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by 500 rupees per maund and closed the spot rate at 16,200 rupees per maund. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said that international cotton prices remained bearish. New York cotton futures closed at 65.30 to 69.06 cents per pound. According to the USDA's weekly export and sales report, sales for the 2024-25 season reached 60,200 bales. Vietnam topped the list by purchasing 28,000 bales. India ranked second with purchases of 18,600 bales, while Pakistan came in third with 6,600 bales. For the 2025-26 season, 36,100 bales were sold. Vietnam again led with 25,100 bales, followed by Turkey in second place with 7,500 bales, and Bangladesh in third with 2,200 bales. Meanwhile, cotton ginning and oil mill industries across Pakistan are experiencing deep disappointment and concern following the federal budget's failure to eliminate the sales tax on cotton and its by-products and to withdraw the exemption on sales tax for imported cotton. This decision comes despite strong recommendations from two committees established by Prime Minister Shehbaz Sharif, raising fears of further factory closures, a significant decline in cotton cultivation, and a sharp drop in cotton prices. Reports indicate a staggering reduction of Rs 1,000 per maund in cotton prices after the budget. Ginners argue that a 'flawed' Export Facilitation Scheme (EFS), introduced several years ago, allowed the duty-free import of cotton, cotton yarn, and grey fabric, while an 18% sales tax was imposed on domestic purchases of these items. Ehsanul Haq, Chairman of the Cotton Ginners Forum, stated, 'This scheme led to the import of millions of cotton bales and cotton yarn, severely damaging the country's foreign exchange reserves.' 'Simultaneously, textile mills stopped purchasing cotton locally, causing a massive drop in the prices of cotton and phutti (seed cotton). As a result, Pakistan's total cotton production for 2024-25 plummeted to a historic low of only 5.5 million bales, with an additional 200,000 bales remaining unsold.' The decline in cotton cultivation has also forced Pakistan to import billions of dollars' worth of edible oil, lamented Junaid Iqbal, another ginner from Punjab. He stated that the EFS has plunged the cotton ginning sector into its worst economic crisis, resulting in the closure of over 800 ginning units and hundreds of oil mills across the country. Haq noted that the exclusion of these recommendations has led to a record drop of Rs. 1,000 per maund in cotton prices within just two days, bringing them down to Rs. 16,000–16,200 per maund, with fears of further declines. Additionally, the Pakistan Cotton Ginners Association has rejected the budget, calling it 'deadly poison' for farmers and the ginning industry. During a telephone conversation with Pakistan's renowned cotton analyst Naseem Usman, Sajid Mahmood, the head of the Transfer of Technology department at the Central Cotton Research Institute Multan, stated that the country's agricultural sector is currently going through a critical phase, where having a clear direction and strategy for sustainable development is absolutely essential. He mentioned that the continuous rise in production costs is becoming a major challenge for farmers, as they neither receive fair prices for their crops nor are provided with easy access to markets. According to Sajid Mahmood, due to the lack of consistent investment in agricultural research and modern technology, most farmers are still forced to rely on traditional farming methods, which directly affects per-acre yield. Sajid Mahmood said that cotton, which was once a strong pillar of Pakistan's economy, textile industry, and rural economy, is now facing a severe crisis. Coordinated efforts and a clear action plan are crucial for its revival. He added that the irrigation system has not kept pace with modern requirements, while the availability of quality seeds, fertilizers, and other agricultural inputs at reasonable prices remains a persistent issue for farmers. He emphasized that the Pakistan Central Cotton Committee (PCCC) is the key institution for cotton research and development in the country. However, unfortunately, billions of rupees in cotton cess dues are still pending from the textile industry. He demanded that these dues be released immediately so that cotton-related research can be strengthened and the scope of advanced research can be expanded further. Sajid Mahmood further stated that the 18% General Sales Tax (GST) on local cotton and its by-products is an unnecessary burden on farmers and the ginning industry, which should be immediately abolished or reduced. These measures would lead to a significant reduction in production costs and promote value addition at the local level. In conclusion, he said that for the development of a crucial sector like agriculture, a comprehensive, long-term, and ground-reality-based policy is indispensable. If experienced agricultural experts and those familiar with ground realities are included in the policymaking process, not only can farmers' difficulties be reduced, but the national economy can also benefit more from this vital sector. Copyright Business Recorder, 2025
Express Tribune
04-06-2025
- Business
- Express Tribune
Textile sector slams EFS, seeks relief
Listen to article The All Pakistan Textile Mills Association (APTMA), Pakistan Cotton Ginners Association (PCGA), and Karachi Cotton Association have jointly demanded the removal of yarn and fabric from the Export Facilitation Scheme (EFS) and the abolition of the 18% sales tax on locally produced cotton and yarn. Speaking at a press conference at APTMA House on Tuesday, APTMA Central Chairman Kamran Arshad, flanked by other industry leaders including Asif Inam, Naveed Ahmed, Khawaja Muhammad Zubair, Jesomal, and Sham Lal, called the policy of zero-rating imports while taxing local production "anti-national." Arshad stated that large-scale industries are deteriorating, and the withdrawal of the EFS for local industry has inflicted massive damage, leading to the shutdown of 120 spinning mills and over 800 ginning factories. He said the textile sector had repeatedly raised concerns with policymakers, including during meetings with International Monetary Fund (IMF) officials, stressing that the industry could not sustain the burden of such heavy taxation. Arshad warned that the government must act before the industry is forced to shut down entirely or relocate abroad, noting that a looming US tariff war has added further pressure. Arshad claimed that the EFS has brought the industry to the edge of collapse. During talks with the IMF, the delegation highlighted the financial losses the sector had faced under the EFS, but were told the matter lies within the jurisdiction of the Federal Board of Revenue (FBR). In response to these concerns, the prime minister has constituted a review committee headed by Federal Minister Ahsan Iqbal to assess the scheme. Urging the government to curtail its own spending instead of overburdening industry, Arshad pointed to the iron and steel sector as another example of policy failure, claiming it suffered over Rs300 billion in losses under the EFS. "If the policy is not reversed, more textile mills will shut down," he warned. Karachi Cotton Association representative Sham Lal said cotton production has declined sharply — from 15 million bales to just 5 million — due to misguided government policies. He criticised the dismantling of the state's traditional "roti, kapra, makaan" (food, clothing, shelter) slogan through flawed economic measures. With 120 spinning mills and over 800 ginning units closed, the industry is collapsing, he said, asking where imported American cotton would go if local factories continue to shut down. Mahesh Kumar of the PCGA added that sugar mills have contributed significantly to the downfall of the cotton sector. He said the ginning industry currently holds 5.5 million bales of unsold cotton and that many ginners are now defaulting on bank loans due to the deteriorating situation. However, not all stakeholders in the textile sector share the same view. The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) criticised APTMA's stance and defended the EFS. PHMA Chairman Babar Khan called the imposition of sales tax under EFS an anti-export measure and said taxing imports within the scheme would damage the export sector. Khan stressed that value-added textile exporters rely on the EFS and are demanding its restoration to its original framework under SRO 957, as it existed before the 2024-25 federal budget. He argued this would enable the entire textile value chain to benefit from tax exemptions. Questioning APTMA's change in position, Khan pointed out that the association had supported the scheme since 2021 but was now opposing it. He accused APTMA of misleading propaganda and of undermining the value-added sector, which, according to him, could have helped Pakistan's textile exports cross the $50 billion mark. The PHMA chief urged the government to ensure equal opportunities for all stakeholders and to reinstate the sales tax exemption on local purchases under the EFS. He said the practice of collecting and then refunding sales tax is inefficient, especially given frequent delays in refunds. Such delays, he added, would create serious liquidity issues for exporters.
Business Recorder
02-06-2025
- Business
- Business Recorder
Weekly Cotton Review: Prices steady, trading activity subdued
KARACHI: The cotton market is showing stability in prices, though trading activity remains subdued. New crop deals for the 2025-26 seasons are being finalized between Rs. 17,200 to Rs. 17,500 per maund, while phutti (seed cotton) is trading at Rs. 8,000 to Rs. 8,500 per 40 kg. According to industry sources, approximately 2,200 bales of the new crop have already arrived at ginning factories across the country. Currently, three ginning factories in Sindh and four in Punjab are partially operational. Market participants anticipate a significant uptick in trading after Eid-ul-Adha. Punjab's Secretary of Agriculture, Iftikhar Ali Soho, reported that the province has achieved 94% of its cotton cultivation target for the current season. Meanwhile, the textile industry has renewed its demand for the abolition of the Export Facilitation Scheme (EFS) and the removal of the 18% sales tax on locally produced cotton. Additionally, calls for eliminating the General Sales Tax (GST) persist, with expectations that the issue may be addressed in the upcoming budget. The Pakistan Cotton Ginners Association (PCGA) and the All Pakistan Textile Mills Association (APTMA) have jointly urged the government to scrap the EFS and abolish the 18% sales tax on domestic cotton. Chairman of the Cotton Ginners Forum (CGF), Ihsan-ul-Haq, warned that the entire cotton sector is grappling with the worst economic crisis in the country's history, stressing the need for immediate policy interventions to revive the industry. During the past week, the local cotton market saw stable prices for cotton. Trading remained limited as the partial arrival of the new cotton crop has begun. Currently, three ginning factories in Sindh province are partially operational, while four ginning factories in Punjab province have also partially started ginning. Partial arrival of phutti (seed cotton) from the lower regions of Sindh has commenced, with approximately 2,200 bales of phutti having reached ginning factories so far. Increased trading activity is expected after Eid-ul-Adha. The government has set a production target of one crore eighteen lakh bales for the new 2025-26 season. Currently, trading in the ongoing season is slow, with cotton prices ranging between 15,000 to 17,500 rupees per maund. Most transactions are being conducted on credit, with deals based on quality and payment conditions. The stock of cotton with ginners is gradually decreasing. Federal Minister for Trade Jam Kamal Khan has stated that the government is seriously working to eliminate the 18% general sales tax on local cotton in order to boost cotton production. He shared this during a press conference on Monday. The PHMA (Pakistan Hosiery Manufacturers Association) has urged the government to reduce electricity tariffs during peak hours to promote exports. In Sindh and Punjab provinces, cotton trading took place between 15,000 to 17,500 rupees per maund, depending on quality and payment conditions. New crop transactions were recorded at 17,000 to 17,500 rupees per maund, while phutti (seed cotton) was sold at 8,000 to 8,800 rupees per 40 kg. The Karachi Cotton Association's Spot Rate Committee maintained the spot rate stable at 16,700 rupees per maund. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said that international cotton prices are experiencing fluctuations. New York cotton prices showed a mixed trend, with futures trading between 65.50 to 69 cents. According to the USDA's weekly export and sales report, 118,700 bales were sold for the year 2024-25. Vietnam remained at the top by purchasing 65,600 bales. Bangladesh secured the second position by buying 17,300 bales, while Turkey ranked third with 12,400 bales. For the year 2025-26, 13,800 bales were sold. Pakistan led the purchases with 7,600 bales, followed by Thailand in second place with 3,500 bales, and Peru in third place with 2,600 bales. Meanwhile, Punjab Agriculture Secretary Iftikhar Ali Sahu has informed the Business Club that cotton cultivation has been completed on over 33 lakh acres in Punjab, and the province has achieved 94% of the set target. He stated this while presiding over a high-level review meeting on the current situation of cotton. Punjab Agriculture Secretary Iftikhar Ali Sahu said that a unique and successful tradition has been established to improve cotton production through phased cultivation. Pakistan's cotton sector is facing its gravest financial crisis in decades, prompting swift government attention after urgent appeals from the Pakistan Cotton Ginners Association (PCGA) and the All Pakistan Textile Mills Association (Aptma). Both associations have launched a high-profile lobbying campaign, writing to Prime Minister Shehbaz Sharif and initiating a nationwide media blitz, demanding the immediate abolition of the Export Facilitation Scheme (EFS) or the removal of sales tax on domestically produced cotton and its by-products. The premier subsequently sought policy recommendations from the Ministry of National Food Security and Research (MNFSR). In response, the ministry has formally endorsed the industry's proposals. In a letter to PCGA President Dr Jassu Mal, Cotton Commissioner Dr Khadim Hussain stated that the government has recommended that the 18pc sales tax on domestic cotton, cottonseed, oilcake, and cottonseed oil be lifted immediately, or that imports of cotton, yarn, and grey cloth be taxed at the same rate. The ministry's recommendations, forwarded to safeguard farmers' incomes, revive local production, and stem Pakistan's soaring dependence on costly cotton imports, it says. The communiqué notes that Punjab has implemented targeted subsidies for farmers to increase their incomes and reduce production costs for various crops. Industry data reveals that textile mills have imported over 300 million kgs of cotton yarn and two million bales of cotton during the first nine months of 2024-25, draining billions of dollars in foreign exchange. Despite this, domestic production has fallen to a historic low of just 5.5m bales. Meanwhile, more than 200,000 bales of unsold cotton and vast stocks of yarn remain idle in factories, with demand at a standstill. Cotton Ginners Forum Chairman Ihsanul Haq says the fallout has been devastating as over 800 ginning units and 120 spinning mills have ceased to function, while hundreds more textile units are barely functioning. 'If the current policy persists, the sector risks total collapse,' he warns, adding that Pakistan may soon be forced to import not only cotton but also edible oil, compounding the country's financial woes. The MNFSR's recommendations underscore the urgency, recommending immediate tax relief for domestic producers or the imposition of equal taxes on imports to restore a level playing field. All eyes are now on the federal government, as the fate of Pakistan's cotton and textile industry hangs in the balance. Copyright Business Recorder, 2025
Business Recorder
26-05-2025
- Business
- Business Recorder
Weekly Cotton Review: Trading activities remain limited
KARACHI: The New York cotton market showed mixed trends, while local cotton prices remained stable. However, trading activities were limited. The Commerce Minister hinted at a possible sales tax exemption on local cotton and proposed including it in the new cotton policy. Meanwhile, Pakistan's textile industry is rapidly declining, as expressed by Kamran Arshad, Chairman of All Pakistan Textile Mills Association (APTMA). Similarly, Ehsanul Haq warned that the cotton industry could face the worst economic crisis in history. In Faisalabad, representatives from All Pakistan Textile Mills Association (APTMA), Pakistan Cotton Ginner's Association (PCGA), All Pakistan Textile Processing Mills Association (APTPMA) / Council of Power Looms Associations/ PYMA held a joint press conference regarding EFS (Export Facilitation Scheme) and highlighted related concerns. Ehsanul Haq, Chairman of the Cotton Ginners Association, stated that incorrect data from Federal Committee on Agriculture (FCA) and National Accounts Committee (NAC) has caused difficulties for stakeholders in cultivation, imports, and price determination, negatively impacting their strategic decision-making. During the past week, the local cotton market saw stable prices, but trading remained limited. Cotton deals were finalized at prices ranging from 16,700 to 17,500 rupees, depending on quality and condition. The stock of cotton with ginners is gradually decreasing. Advance deals for the new crop of 2025 - 2026 (Phutti and cotton) are taking place. In Sindh, Phutti was traded at 8,300 to 8,500 rupees per 40 kg, while cotton deals were made at 16,000 to 17,500 rupees per maund. It is said that by the third week of May, two or three ginning factories in Punjab are expected to partially start operations using Phutti from Sindh. In lower Sindh and several cotton-growing areas of Punjab, Phutti production is underway, and partial picking has also begun. The Federal Committee on Agriculture has set a production target of 10.18 million bales of cotton for the upcoming 2025-26 season. APTMA, PCGA, and FPCCI have repeatedly appealed to the government regarding the continuation of the Export Facilitation Scheme (EFS) and are persistently urging for its approval, but no decision has been made so far. Some circles remain hopeful that a solution will be proposed in the budget. Nevertheless, textile industries and PCGA cotton ginners continue to submit requests concerning EFS. FPCCI and various organizations have held meetings and press conferences, emphasizing the need for a level playing field by restoring the EFS facility, but no positive steps have been taken thus far. On the contrary, the Textile Value Added Association is demanding the continuation of EFS. A delegation comprising PCGA Chairman Dr. Jesumal Lemani, former Chairman Suhail Mahmood Haral, and APTMA Chairman Kamran Arshad met with Prime Minister Shehbaz Sharif, who assured them that the sales tax on local cotton and other taxes on by-products would be abolished in the budget. However, there is no confirmation yet on whether a final decision will be made in this regard. Meanwhile, the Pakistan Business Forum has demanded the removal of GST in the budget. Pakistan's textile industry is rapidly declining as the government has failed to address a critical flaw in the Export Facilitation Scheme for over 10 months. According to a press release by APTMA, the result is a severely flawed tax system that has rendered the local industry uncompetitive, destroyed domestic supply chains, and handed over Pakistan's textile value chain to foreign suppliers. Kamran Arshad, Chairman of the All Pakistan Textile Mills Association (APTMA), stated that the government must immediately remove yarn and fabric from the EFS import scheme. This is the only way to prevent the collapse of Pakistan's textile industry. In the provinces of Sindh and Punjab, the price of cotton per maund ranges between Rs16,000 and Rs 17,500, depending on quality and condition. Advance deals for the new crop have been settled at Rs 17,300 to Rs 17,500 per maund. The Spot Rate Committee of the Karachi Cotton Association has maintained the spot rate stable at Rs 16,700 per maund. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said that international cotton prices remained stable. The price of New York cotton futures is currently trading between 66.00 and 70.00 American cents. According to the USDA's weekly export and sales report, sales for the 2024-25 season reached 141,400 bales. Vietnam remained the top buyer, purchasing 61,800 bales, while Turkey ranked second with 19,400 bales. Pakistan secured the third position by buying 18,700 bales. For the 2025-26 season, sales were 7,400 bales, with Honduras leading at 5,500 bales, followed by Vietnam in second place with 1,900 bales. Meanwhile, Federal Commerce Minister Jam Muhammad Kamal has informed the National Assembly that the government is developing a new textile policy, which is likely to include a proposal to exempt domestically produced cotton from the existing 11% sales tax. The minister also addressed the 30% retaliatory tariff imposed by the United States on Pakistan, which is currently suspended for 90 days. Exporters generally view this tariff as a challenge, though some believe it could also present an opportunity for Pakistani products in the U.S. market due to higher tariffs imposed on competing countries. To address these challenges, the Prime Minister has formed a steering committee and a working group tasked with conducting a detailed analysis of the U.S. retaliatory tariffs and formulating a policy response. The Commerce Ministry is collaborating with various ministries, departments, exporters, and relevant stakeholders to develop a strategy for effective engagement with US authorities. In the fiscal year 2023-24, Pakistan's exports to the United States amounted to $5.3 billion, while imports were $2.2 billion, resulting in a trade surplus of $3.1 billion, according to the Business Club. In the current fiscal year (until March 2025), Pakistan exported $4.4 billion worth of goods to the U.S. and imported $1.9 billion, maintaining a trade surplus of $2.5 billion. Pakistan's major exports to the U.S. include garments, medical equipment, and PET bottle-grade products, while key imports from the U.S. consist of cotton, iron and steel scrap, computers, petroleum products, soybeans, and almonds. Additionally, concerns have been raised that despite the start of the new cotton ginning season in the second week of May—a first in the country's history—the tax-free import of raw cotton and cotton yarn from abroad may push the entire cotton industry, including ginning, into the worst economic crisis in Pakistan's history. As a result, during the 2025-26 cotton season, the ginning and textile industry may operate at less than 50% of its full production capacity. This could force Pakistan to once again import billions of dollars' worth of cotton, along with billions in edible oil. Ehsan ul Haq, Chairman of the Cotton Ginners Forum, said that three ginning factories have become operational in Khanewal and Burewala in Punjab, while reports suggest one or two factories in Tando Adam, Sindh, will start operations by May 25. He stated that initial deals for new cotton are being settled between Rs. 17,000 to Rs. 17,500 per maund, while new phutti (seed cotton) is being traded at Rs. 8,300 to Rs. 8,500 per 40 kg. He further revealed that the federal government has allowed the import of cottonseed after nearly 50 years. However, reports indicate that some high-ranking government officials and private seed companies had previously imported cottonseed from China, Australia, the U.S., and Brazil for trial cultivation in various parts of Pakistan. These efforts failed largely due to environmental pollution caused by the lack of enforcement of crop zoning laws, which prevented the cotton crop from thriving. Haq emphasized that the current issue in Pakistan is not cotton production but its consumption. Despite the second-lowest cotton crop in history—only 5.5 million bales in the 2024-25 season—around 200,000 to 250,000 bales of unsold cotton remain in ginning factories. Additionally, cotton ginners have yet to receive hundreds of millions of rupees from textile mills for cotton sold on deferred payments. He also warned that cotton cultivation in some areas of Punjab, Sindh, and Balochistan is at risk due to canal water shortages and sudden temperature spikes, which may cause the crop to wither soon after sprouting. Furthermore, if the federal government does not abolish or domestically implement the Export Facilitation Scheme (EFS) in the upcoming budget, the country's cotton industry could face its worst economic crisis, leading to significant foreign exchange expenditures on imports of cotton, cotton yarn, grey cloth, and edible oil. The cotton sector is also troubled by the 'laughable' production figures released by the National Accounts Committee (NAC) for the past two years. This concern stems from previous miscalculations by the Federal Committee on Agriculture (FCA) regarding cotton cultivation and targets over the past decade. For the 2023-24 cotton season, the Pakistan Cotton Ginners Association (PCGA) reported total national production at 8.4 million bales, while the NAC projected an 'inflated figure' of 10.22 million bales. This discrepancy continues for the 2024-25 season, with PCGA reporting 5.5 million bales and NAC claiming 7.08 million bales. Ehsan ul Haq, Chairman of the Cotton Ginners Forum, emphasized that the incorrect statistics from the FCA and NAC create significant difficulties for stakeholders in formulating their strategies for cultivation, imports, and pricing. 'Inaccurate data could lead to a decline in cotton-based exports due to insufficient imports of raw cotton,' he warned. He stressed the importance of government institutions consistently releasing accurate cultivation and production statistics in their annual planning to help stakeholders avoid such complications. Meanwhile, both the Aptma and the PCGA have written to Prime Minister Shehbaz Sharif and launched an advertising campaign. Their message is clear: if the Export Facilitation Scheme is not abolished or its domestic application is not implemented, and if the 18 percent sales tax on cotton seed, cotton seed oil, and oil cake (khal banola) is not removed, the cotton ginning and textile sectors will find it nearly impossible to remain operational. Approximately 800 ginning factories and over 120 textile mills have already ceased operations due to this scheme. Copyright Business Recorder, 2025
Business Recorder
09-05-2025
- Business
- Business Recorder
National cotton policy: KCA hails APTMA-PCGA decision
LAHORE: The Karachi Cotton Association (KCA) has taken note of recent reports in the electronic media indicating that the All Pakistan Textile Mills Association (APTMA) and the Pakistan Cotton Ginners Association (PCGA) are collaborating to draft a National Cotton Policy, formulate a standardized sale/purchase contract for raw cotton, and work towards the revival of cotton production in the country. The KCA has expressed its appreciation for these efforts and reaffirmed its commitment to supporting initiatives aimed at revitalizing Pakistan's cotton sector. The KCA recalled that it has been consistently urging all stakeholders in the cotton economy to come together and develop a joint strategy for the government's consideration to boost cotton production. The objective is to meet the growing demands of the local textile industry, generate surplus for export to earn foreign exchange, and reduce reliance on cotton imports to conserve the country's valuable foreign reserves. However, despite repeated invitations, the KCA has yet to receive a positive response from other key players in the cotton trade for reasons that remain unclear. The association has repeatedly urged the government to take necessary steps to enhance cotton quality, improve bale packaging, and ensure a standardized weight of 170 kg per bale for the benefit of the entire cotton trade and industry. The KCA emphasized that cotton exporters, as secondary buyers, play a crucial role in stabilizing the market and protecting the interests of cotton growers. It further stressed that any National Cotton Policy should only be finalized after thorough consultations with all stakeholders, including the KCA, which serves as the premier body of Pakistan's cotton trade. The KCA highlighted that it had previously developed a draft for a local sale/purchase contract for raw cotton, incorporating provisions for arbitration under its bylaws in case of disputes between buyers and sellers. This draft was shared with APTMA and PCGA for approval. While PCGA endorsed the proposal, APTMA's approval remains pending. The KCA believes that since the draft contract was the result of extensive deliberations and has already been approved by both KCA and PCGA, APTMA should also consider endorsing it to avoid unnecessary delays in finalizing a new draft. The KCA has called upon the government to ensure that any National Cotton Policy is finalized and approved only after comprehensive consultations with all relevant stakeholders, including the KCA. Additionally, the association has urged authorities to implement measures aimed at increasing cotton production, improving quality, standardizing bale weights, and enhancing packaging to support the broader cotton trade and industry. Copyright Business Recorder, 2025
