It is somewhat comforting to learn that in the thick of worsening quandary on the cotton front the Trading Corporation of Pakistan (TCP) has been prevailed upon so to amend its earlier published tender notice for procurement of 100,000 bales of cotton, as to delete "clean cotton" in it ostensibly as an ad hoc response to the spirited campaign launched by All Pakistan Textile Mills Association (Aptma).
However, as a sequel to its mounting pressure, a stage was reached to get the matter thrashed at a twice postponed meeting of an Aptma delegation with Prime Minister Yousuf Raza Gilani. But in keeping with traditions of bureaucracy, instead of waiting for its result, the TCP proceeded with the procurement drive in its own wisdom.
Now licking its wound, in a corrigendum on January 22, 2009, it has stated that "clean cotton" appearing in its tender of January 1, 2009 may be treated as deleted, while extending the opening date of the tender from January 22 to January 27. Be that as it may, as a recent issue of Business Recorder had revealed, the Aptma taking a strong stand on procurement of 100,000 bales of "contamination-free" cotton by the TCP, had written letters to different ministries on its disquieting aspects.
For one, it contended that assignment of the task to the TCP is sort of an ostensible attempt to increase prices of cotton in the local market, simply because the specific quality of cotton now sought is no more available in Pakistan. Hence, TCP might end up, instead, in paying a premium on what can at best be termed low contamination cotton.
It had also pointed out that according to stated government policy, cotton import and export should be free of any barriers, so that the domestic industry gets it at a rate which competes with exporters of cotton. This is why domestic rate, invariably, needs correspond to the international market. More to this an Aptma official reportedly pointed out that during current season commodity markets across the world collapsed.
New York cotton market, which was about 70 cents per pound, fell below 40 cents. In the same way, domestic prices dipped from Rs 4200 per maund to Rs 2800 per maund. Nevertheless, despite its declared policy against TCP intervention, when the government decided to intervene, Aptma turned into a silent observer, acknowledging the need of support to farmers!
However, during the process of procurement, it claims to have observed that farmers were not the beneficiary as they had already sold the crop, an argument that may well sound like an after thought. But the observations such as New York prices moving from 40 cents to 50 cents and domestic prices spurting from Rs 2800 to Rs 3400, making TCP intervention unnecessary, and rumours of up to Rs 150 per maund commission involved in the transactions may not be disputed.
The same can be said of its fear that there will be quality and weight claims when this cotton is eventually disposed of. Apmta is therefore reported to have concluded that since the market has moved favourably and since the farmer has sold his entire crop, TCP intervention needs be stopped. Again, as they put it, TCP's certification of a cotton lot as contamination free cotton will never be acceptable to domestic or foreign traders.
However, all said, contamination of cotton in Pakistan will appear as having come to stay. After all, contamination in cotton revolves around presence of materials other than cotton. And these encompass an incongruous range - fragments of polypropylene bags, shreds of cloth, bits of rope twine, human and animal hair, leaves, small twigs - and so on, the mix-up occurring during the picking and packing of seed cotton.
As such, the quality of products made from such infested cotton, understandably, leads to sale of yarn and clothes at lower rates in the international market, causing huge losses in terms of foreign exchange.
This alone should have necessitated a marked focus on elimination of contamination, to which little attention was paid until after the beginning of the new millennium, and synchronising with the unfolding outcome of the advent of Musharraf regime with its agenda of extensive political and economic reforms.
It was in the thick of that hope-inspiring environment that the then Commerce Minister Razzak Dawood sparked several bright economic ideas, including revival of promotion of contamination-free cotton with its tremendous potential for value-addition and corporate farming, as an unfailing means of revolutionising the country's agriculture dominated economy.
However, the exuberance over the prospects of decontamination of cotton traditionally continued echoing and re-echoing in government and industrial circles alike, though gradually subsiding with time. High on ambition and low on performance, as our economic managers are known to be, action in the desired direction remained awaiting its orderly implementation.
In between, while disjointed efforts continued, no serious thought seems to have gone into fruition of the idea in a planned manner. Similarly, some three decades earlier, in the aftermath of nationalisation, on complaints of excessive foreign matter from the overseas buyers and other malpractices, the matter was entrusted to the Cotton Export Corporation (CEC), not proving of much avail though.
It may be recalled with nostalgia that before the sway of nationalisation, cotton trade was gainfully handled by the private sector, with the bulk of raw cotton production being exported. As for now, the textile sector and the government, in particular, still need to combat this evil together, in accordance with the earlier initiated scheme, with a marked focus on all of its stipulations.
It will be poor consolation to recall that the haphazard launch from a half-baked approach for contamination-free cotton, a couple of years ago, in selected ginning factories, saw low-grade cotton coming in, and ending up in complete failure. Now is certainly the time to revisit the original scheme of things in right earnest and to proceed along with an unshakeable will of the elected government without any let or hindrance.
Comments
Comments are closed.