Textile sector's woes

The new textile policy is likely to be announced in a couple of weeks at a time when the textile sector is on the verge of collapse due to global as well as domestic economic crises. Some of the textile units have already closed down and the rest are facing great difficulty in keeping their wheel running due to high cost of production and raw material. The country may face vast scale unemployment too.
Textile products export share about 70% ($10 billion approx) of the total foreign exchange earnings of the country. Therefore, collapse of textile sector means the collapse of the overall economy of the country. For the revival of deteriorating condition of the economy, besides taking some immediate steps to rescue the textile sector, a concrete long term policy is required to be framed.
The textile sector is in the jaws of the high rate of interest as well as the loans of the banks which are the main problems at present. At the financial cost of about 18%, it is almost impossible for the industry to survive. Interest rate is required to be brought down at a reasonable level where industry can breathe. The immediate step textile industry needs for its survival is the deferment of the recovery of loans by the banks at least for two years.
It is the time for the financial institutions/banks to come forward to play their role in the revival of the business activities in the country, taking bold steps by offering incentives to the industry which is vital for them too. Our industry has the potential to deliver the desired results if given the financial relief at this time of crises. Only a supporting monetary policy in the forthcoming budget can help save the industry from disaster.
Gradual increase in the cost of gas and electricity is another big issue damaging the industry. Instead of providing electricity to industry on reasonable rates, the government is continuously raising the power tariff which is not understandable. Mismanagement in the production and distribution of electricity and gas, resulting in heavy loadshedding, is also a big blow to the industry. Proper management can improve the supply situation.
Cotton sowing, ginning and spinning processes are interrelated fields and they are linked with each other in all respects as a chain and dependent on each other. If one field suffers its effects appear on the other two. It is very unfortunate that we could not have a policy safe guarding the interests of all three fields simultaneously in the country for the last 60 years.
Being under different ministries, each sector has been framing its own policy with out having proper co-ordination with each other. Therefore the policies so made ended up as failure and no significant progress, particularly in the field of cotton production and ginning, could be made so far to feed the local textile industry with the required quality and quantity of raw material.
Tackling the major problems by ad hoc arrangements without knowing about the root cause and lack of proper co-ordination amongst concerned ministries/ departments has been the main hazard in achieving the required goals in the country. While mending one end the other one is ignored. That's why the textile sector could not deliver to the optimum potential.
At the time of independence, the cotton production in the country was one million bales which has gradually reached to around 12 million bales by now. However, the cotton production could not grow with the increasing consumption of the textile industry. The country has to import about 2.5 to 3.0 million bales every year to make up the shortfall.
We need to fill this gap locally as soon as possible to save the foreign exchange. The government should facilitate and encourage the growers to boost up the cotton production in the country. The availability of pure seed, pesticide and urea in abundance at reasonable prices are the basic requirements to enhance the production. The mafia, playing with the interests of the growers by hoarding the stocks of agri. in-puts to flare up the prices, must be dealt with iron hands. They played havoc this year taking the prices of urea and DAP to sky high artificially.
With the induction of BT cotton India has doubled its production since the last few years. Proper work needs to be done on BT cotton locally which will help reduce the expenses of pesticides and increase the production. However seed mafia in the country should not be allowed to play with the innocent growers by providing them adulterated seed in the name of BT. Instead of increasing the cotton production, indiscriminate use of fake BT seed during the last two years even reduced the production.
The emphasis of the breeders has mainly been on evolving the varieties which yield more per acre and the fiber characteristics required by the end user, the spinner, are never given due consideration. A huge foreign exchange is consumed every year by the spinners on the import of contamination free cotton as well as medium-long to long staple cotton.
Had the breeders kept in view the requirement of the end user, the country would have saved huge foreign exchange every year. Most of the varieties sown in the country bear high micronaire value which is undesirable for spinning fine count yarn. A few breeders in private sector worked on medium-long staple cotton but the varieties could not attract the spinner because of having high micronaire value.
The characteristics of our cotton are good to produce coarse count yarn which is about 60% of the total production of textile industry. Therefore, the breeders ought to work on producing medium long to long staple cotton to meet the rest of 40% demand of the local spinner. Instead of spending huge amount of foreign exchange on import of medium to medium long staple cotton, the government should encourage growers and breeders to produce the requisite varieties locally.
Clean cotton with better fiber characteristics is the requirement of the spinning mills to meet the challenges of the time. Least importance is given to the cotton ginning process and upgradation of the ginneries ignoring the aspect of quality of cotton which is most important requirement of the end-user. Therefore, the govt. should feel the importance of upgradation of ginneries.
Our ginning industry can be upgraded/modernise by locally made cheaper equipments. Basically our minds need to be tuned to the improvement of the quality. A ginning institute was planned to be set up in public sector a few years ago, the fate thereof is unknown so far and is still somewhere in papers and no progress has been made in this regard.
In order to survive in the present economic recession; we have to deliver the quality. The main obstacle, in terms of quality in yarn export is the contamination. We are gradually losing our buyers of yarn due to contamination in our cotton. The textile sector and the government in particular have to be on their feet to combat against this evil.
A few years ago some efforts were made to eliminate contamination; however the project lost attention of the government soon due to unknown reasons. The project of contamination free/clean cotton started by TCP, ended up in complete failure again due to improper planning.
It is difficult to improve the quality of cotton until a proper marketing system is adopted in the country. Our local cotton business does not take place according to any prescribed system of grading. It is unfortunate that we could not name our cotton so far to describe it technically. The KCA announces the cotton rates on the basis of grades evolved by Pakistan Cotton Standard Institute, but there is no practical application of those grades in the country.
The grading system should immediately be applied and adopted by the buyer and the seller both to bring about improvements in our ginning process to obtain better quality cotton. As long as the seller is not paid according to quality/grade, the efforts to improve the lint quality will not bring fruitful results. Our spinning mills producing quality yarn are now paying premium on quality cotton but without any systematic way.
To begin with the application of grading system, the HVI laboratories set up by the government in different districts in cotton belt may play a significant role. The testing of the entire production of cotton in the country be made mandatory by HVI labs to assess the quality. It will certainly help improve cotton marketing system in the country and facilitate textile mills to choose the cotton according to their requirement. Our textile sector has been facing multifarious problems since long.
In the past, this sector has been given a temporary relief on ad hoc basis at the time of crises and no comprehensive planning and policy have been made to get the best out of this sector. Therefore, under the recent global economic crises, a concrete, comprehensive and long term textile policy covering all the allied fields is the need of the hour. Ad hoc policies are not going to work any more. However, immediate financial relief/ support of the banks/financial institutions can help bale out the textile industry from the crises to the country's economy back on track.