The value-added textile sector has accused the government of failing to take timely decisions with respect to availability of raw cotton in the domestic market leading to a severe yarn and cotton shortage in the county. "The value-added textile sector would not have faced the acute yarn and cotton shortage it is facing today if the government had taken timely decisions", Chairman Pakistan Apparel Forum, Javed Balvani said in an exclusive interview with Business Recorder on Thursday.
Per maund cotton price increased by a whopping 106 percent during the last season while yarn price ballooned by 80 percent, he elaborated. Global cotton production declined by 5 percent compelling many countries to import cotton to meet local demand, Balvani said. Pakistan's cotton production stood at 12.7 million bales against the government estimated target of 14 million bales for 2009-10. Pakistan has a domestic requirement of about 15.5 million bales; in addition the government allowed cotton exports which further exacerbated the shortage in the domestic market.
An official of the textile ministry said that huge quantities of three categories of yarn was exported mainly to China after failure of the crop in all major cotton producing countries of the region including China, which has resulted in shortage for the local industry.
Due to low cotton production, raw cotton prices surged in three Asian countries namely India, China and Pakistan during the last few months. However, China successfully imported cotton to meet its requirements while India banned exports of cotton to ensure that its domestic value-added sector's demand would be met in time but Pakistan failed to take any action to forestall the crisis. Today the yarn sector is facing an acute shortage of cotton - the effects of which are filtering to higher value-added products in the chain.
Talking to Business Recorder Chairman Karachi Cotton Brokers Forum, Naseem Usman revealed that the price of cotton has reached an all time high: Rs 6900 per maund against Rs 3,300 in the month of August while in India it is Rs 6000 per maund. In India when raw cotton rose to Rs 30,000 to Rs 31000 per kandi (356kg) the government acted promptly and imposed a ban on raw cotton exports on April 19, 2010 due to which prices in the local market decreased by Rs 2000 to Rs 3000 per kandi.
Chairman Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association (PCFAMEA) Dr Shahzad Arshad said that the big issue for the value-added sector was not the yarn prices but unavailability of the commodity. Due to paucity of raw cotton in the local market, yarn prices have skyrocketed and thereby negatively impacted on textile exports and made it difficult to achieve the government's export target, Arshad said.