Chief Minister Punjab Shahbaz Sharif has sought Prime Minister Nawaz Sharif's intervention to address the issue of low price of seed-cotton, which, he argued has led to an untenable situation for the provincial government politically as well as administratively. This was stated in a letter written by Chief Minister Punjab to Prime Minister, a copy of which is available with Business Recorder.
"It is expected that the cotton price trend during this year (2015-16) will not be much different from the previous year, which means that farmers cannot expect a fair return for their cotton crop. This situation is breeding unrest in the farming communities all over Punjab. This unrest is resulting in an ungainly situation for the provincial government politically as well as administratively," maintained the letter.
During 2014-15, due to fluctuating international lint prices, cotton growers suffered badly; average seed-cotton price during cotton picking season last year remained below the average cost of production calculated by Punjab Cost of Production Committee. Keeping in view the low market rates of cotton during 2014-15 the federal government intervened and started purchasing lint through Trading Corporation of Pakistan (TCP). Due to bad timing and design issues, the intended benefit could not accrue to the farmers and TCP halted procurement operations at 96,000 bales against a target of one million bales. During 2015-16, cotton has been sown on 5.7 million acres and the expected production for the season is 10.5 million bales for Punjab. It is expected that the price trend during this year will not be much different from the previous year, which means that farmers cannot expect a fair return for their cotton crop.
Keeping in view the prevailing situation, the provincial government has requested that a comprehensive framework in respect of intervention price, size, timing and mode of purchase may be drawn at the federal level in consultation with stakeholders at the earliest for ensuring a fair return to the cotton growers during the forthcoming cotton picking season, urged the letter. In order to stabilise the cotton prices in the current season, standing committee of the National Assembly on textile industry decided to procure two million bales of cotton at Rs 3200/40 kg of seed cotton in its meeting held on June 2, 2015. The committee also directed that provinces be taken on board in the procurement process and sent requests to chief ministers Punjab and Sindh for a meeting in this regard. Their response is still awaited despite a reminder from the committee.
Sources revealed that the ministry of textile industry held a stakeholders' meeting last week and decided to move a summary for the procurement of 13 million maunds of seed cotton (equivalent to one million bales) at the price of Rs 3000/40 kg. The summary is being finalised by the ministry of textile industry and will be sent to Prime Minister being Minister In-charge for approval before placing it to ECC of the Cabinet for consideration. As an historic prospective the cotton prices in Pakistan remain 10-15 cents below that of Cotlook A Index due to a lack of quality based pricing system and non-practising of cotton standardisation system. It is therefore expected that in Pakistan prices would remain between 55-61 cents per pound or Rs 5000-5500 per 40 kg (or Rs 4650 to Rs 5130/maund.
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