All Pakistan Textile Mills Association (APTMA) on Tuesday has urged federal government to remove duty and taxes on the import of raw cotton otherwise the domestic textile industry would not be able to full fill its export commitments.
Central chairman All Pakistan Textile Mills Association Dr Amanullah Kassim Machiyara said this while addressing a hurriedly called press conference along with Chairman APTMA Punjab Adil Bashir at the Punjab office.
He also said that the industry would have to spend $1.5 billion on import of 5.5 million bales due to a 35 percent production shortage this year. He said the quality of locally produced cotton has also deteriorated as compared to other cotton-producing countries. The imposition of duty with heavy incidental impact for the entire value chain meant to produce goods meant for exports, he stressed.
He said it is an irony that the government's crop estimates are always on the higher side, which are seldom proved true. This year again, he said, the initial estimate of 15 million bales was suddenly revised to 10 million bales, which is now apprehended to be around 9.5 million bales, resultantly causing a shortage of 5.5 million bales.
Amanulah Kassim said that instead of announcing support price of cotton government should invest in enhancing the quality of the seed. He also said the industry would have no option but to procure cotton from the international sources while incurring extra cost in terms of freight charges.
According to him, Pakistan is 3rd largest producer of denim and it is far better in quality than its immediate competitors.
While listing down the reasons of low productivity, he said, poor research on seed, adulterated pesticides and encroachment of sugarcane of cotton growing areas are prime reasons for it.
While urging to encourage the production of new GMO varieties, he said APTMA was set to launch research work on cottonseed. He has also questioned the performance Pakistan Central Cotton Committee on cotton research.
He lamented that Pakistan has become a net importer of cotton today while it was a cotton exporting country once.
He has also urged the government to release refunds of exporters without further delay, as the exporters on account of sales tax and duty drawback without further delay, as the industry was facing a liquidity crunch at present and banks are not willing to increase limits of the industry, as there is a strident increase of liquidity requirement due to imposition of sales tax and devaluation. He said the stuck up refunds have added fuel to the fire.
Also, he has urged the government to resolve the CNIC issue with small traders so that sales in the domestic commerce should pick up.
Speaking on the occasion, Chairman APTMA Punjab Adil Bashir said duty-free import be immediately allowed as both contamination-free and large-staple cotton are not produced locally to meet production Programme of the industry.
The Chairman APTMA informed that the latest cotton production statistics of Pakistan Cotton Ginners Association (PCGA) and the domestic cotton prices shows the current arrivals to be well short as compared to the corresponding period last year. Comparative analysis of cotton arrival up to 1st October 2019 versus 1st October 2018 shows a 39 percent decline in cotton arrival.
In the latest development in crop estimates, he urged the federal government for immediately withdraw of 3 percent Custom Duty and 2 percent Additional Duty and 5 percent Sales Tax levied on the import of raw cotton to enable the textile industry to meet its requirements for domestic as well as for export orders.
The removal of taxes and duty on import of raw cotton will support the textile industry to fulfill its foreign commitment, he added. Machiyara mentioned that Pakistan's textile industry requires medium and longer staple contamination free and organic cotton, which are not being produced in Pakistan and always textile mills need to import to produce specialty yarns.
He said that the government should act without further delay and announced an emergency to support the domestic textile sector. The import of cotton at low cost will help the industry to fulfill its export commitments.
The Chairman APTMA has pleaded with the Prime Minister, Ministry of Commerce for immediate removal of duty and taxes on import of cotton so that the textile industry could retain its competitive edge.
On the occasion, former chairman APTMA Yasin Siddik, Asif Inam and others were also present and talked about the current situation of the textile industry. They also demanded for relief in shape of removal of taxes and duties on import.
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