The Pakistan Cotton Ginners'''' Association (PCGA) released its fortnightly cotton arrival and disposal figures up to 31st January, 07 on last Saturday. According to this report, total arrivals are reported at 11,928,506 local weight bales, total sales (mills and exporters) is 10,104,968 bales and total unsold stock is 1,739,607 bales.
Now, it appears quite certain that total crop would cross the level of 12.5 million bales and finally may finish closer to the level of 13.0 million bales.
Some of the factories in lower Sindh are still operating and receiving truckloads of seed-cotton at rates around Rs 900 per 40 Kg ex-gin. Thus, these ginning factories are making fabulous profits, one insider said. The ginners of Southern Punjab and Upper Sindh are holding larger stocks of unsold cotton but do not seem worried. The Spinner- buyers are forced to pay the ginner''''s asking price around Rs 2,600 - 2.625 for better quality cotton.
Some sales of lower grade have been reported at rates lower than Rs 2,300. Lower grade cotton may be under selling pressure and its prices may go below the present level. Some ginners are upholding the sales of better quality cotton and want to dispose of lower grade cotton first. The cost of carrying charges is very high up to Rs 50 per maund per month so it does not appear viable to carry lint cotton bales for months as the expected increase in lint price may hardly meet the extra carrying charges.
If the prices of lower grade cotton come down to the level of Rs 2,200 per maund, it may attract foreign buying. To meet the increasing local mill demand of lint cotton, some 2.5 million bales are likely to be imported during this season as so far about 1.6 - 1.8 million bales have already been booked from different sources especially from India, CIS and African countries. Some of the local mills have made direct connection with Indian exporters and have deputed their selectors for selection of lint cotton.
It appears that in the near future Indian cotton would largely be imported into Pakistan in view of advantage of suitability of cotton, low shipping cost, shorter shipment period and competitive price. Prominent cotton exporting houses of USA and India have established their office and warehouse to sell their cotton in China.
Some of the prominent retail chain stores in US are planning to source their requirement of textile and apparel goods from Pakistan. As such, some of the groups are in the process of negotiations with the local textile groups for entering into a joint-venture business or to establish their own industry for manufacturing textile and apparel goods required by their chain stores.
Apparently, it is good for the economy of Pakistan that foreign investment would come into Pakistan but if the investment is made on larger scale then our textile industry would be high-jacked by multinational companies and keep our textile entrepreneurs on wages instead of profit as is in Bangladesh.
The Western and American countries fear that in the long run, their retail market would mainly dependent on textile and apparel supplies from countries like China, India, Pakistan, Bangladesh, Vietnam, and Sri Lanka all falling in Asian continent. Taking advantage of the free-trade and to counter the fears they are planning to tap our resources to the benefit of their people. The multinational retail stores and companies may manage to avail better facilities of infrastructure. These MNSs would bring their own funds at very low interest rates and may install their own power plants to make the business more competitive and profitable than that of the local manufacturers.
Of course, foreign companies are making huge investments through buying important industries, financial institutions and other business concerns in Pakistan but all profit would be transferred to their respective countries while local entrepreneurs re-invest the profit in Pakistan. Beside, the MNCs / MNSs would be at liberty to take their investment back to their countries if they do not find business conditions conducive. Thus all that glitters is not gold. The concerned authorities should keep close watch on the situation and take only such decisions, which serve the interests of Pakistan and not those of others.
Pakistan is a single industry country ie, the main industry is textile which earns up to 66 percent of the total annual foreign exchange earnings. Pakistan is more independent economically than politically and we keep it intact. When Pakistan''''s Prime Minister visited China a couple of months back, he had signed with the Chinese Prime Minister a five-year bilateral economic cooperation agreement identifying textile as area of collaboration between the two countries.
China is interested in joint venture business investment and technology collaboration in areas of cotton growing and processing, development of chemical fibre industry, upgrading textile equipments and technology, boosting market competitiveness internationally in textile products. China is the biggest player in cotton textile industries and is the largest importer of raw cotton and we cannot export any cotton to China as we are already short by some 2.5 million bales annually.
What we need is the assistance and cooperation of China and USA in improving our efficiency and competitiveness in textile sector for staying competitive in the world market and not over-taking our textile industry for own benefits. The next few years are very crucial for Pakistan''''s politics and economy as well.
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