The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has shown serious concern over the abrupt increase in cotton prices. The cottonseed prices have increased by Rs 100 per 40 kg in the country during the last four days.
This unusual and sudden increase in prices will not only affect the entire cost of textile products but also damage the export and viability of the textile industry, Tanveer Ahmed Sheikh, President FPCCI said on Tuesday.
He pointed out that the textile industry in Pakistan has been facing severe problems to compete in the international market because of the uneven playing field where several constraints have been damaging its competitiveness.
High prices of raw material, energy prices and failure of uninterrupted power supply, and high mark up rates are the major constraints which are being faced by the textile industry for the last several years and the business operation in this sector has become unviable because of those constraints. Several units in the textile and its ancillary industry have closed their operation, which ultimately has aggravated the unemployment problem in Pakistan, Tanveer Sheikh said.
Cotton is the major raw material in textile industry, which covers about 60 percent of the cost of production, he said and added that the effect of any change in cotton price on the cost of production is obvious.
Tanveer Sheikh said any jump in the cost of production might affect the export of textile products from Pakistan. The present crisis may create problems to fulfil the international commitment of the supply of textile products, he added.
He said the FPCCI had recommended several measures to ensure the stability in cotton prices. Permission of import of cotton from Wagah border, encouraging the cultivation of BT cotton on commercial scale, improvement in the assessment mechanism of crop size and increase in the per acre yield were included in the measures recommended by the FPCCI in the past, he added. "The present jump in cotton prices is a natural consequence of ignoring the FPCCI recommendations. This crisis could have been avoided by taking timely measures proposed by FPCCI," he added.
Meanwhile, FPCCI in a statement issued on Monday said the importers are facing a lot of difficulties as the shipping companies are levying container detention charges for four days during which the entire activities in Karachi came to a stand-still due to arrival of former prime minister Benazir Bhutto and consequent three days of mourning due to the bomb blasts in which over 140 people died and hundreds injured.
The Karachi Port Trust has waived the charges in view of the circumstances, which were beyond the control of the importers, Tanveer Sheikh said and appealed to the shipping companies that they should also waive the container detention charges so that the importers are not penalised for a delay, which was beyond their control.