'Fair play', after the free market mechanism, would be the name of the game in textile industry now in order to survive in prevailing crisis of cotton prices, said Chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), Ijaz A Khokhar.
Talking to Business Recorder, he said he was going to host a roundtable of industry stakeholders to look into the ways and means as to how to ensure survival of textile value-added chain in rising crisis of cotton prices. It may be noted that the spinners are already crying for wiping off Rs 50 billion on carryover stocks in the face of bumper cotton crop of 16 million bales ahead.
He said 100 percent decline in cotton prices internationally, from $2 to $1 per pound has left them with 1.6 million bales as carryover stock. This sharp decline in prices has reduced the value of stocks from Rs 100 billion to Rs 50 billion since April. However, they are not ready to discuss about the profits of similar nature they made when cotton prices jumped 70 cent to $2 per pound last year.
But PRGMEA chairman has turned up with a different approach. He said he was aiming at evolving consensus among industry stakeholders on 'fair play' to avoid domino effect of the crisis in cotton prices. He said main objective of the roundtable conference is to build mutual trust and confidence among all stakeholders to push out the negative impact of crisis relating to cotton prices.
Khokhar said only mutual trust and confidence would let the industry grow in adverse circumstances. Earlier, he said, there had been complaints relating to cartelisation of influential links in the textile industry chain, exposing the weaker ones to vulnerable situations in the past.
He said this is duty of each and every stakeholder to join hands and steer the cotton farmers out of heavy losses, who are at the forefront of the dip in cotton prices. When asked how the textile industry stakeholders can help the farmers, he said lifting of the cotton should be ensured by generating a demand for it in the industry.
According to him, it is irony that the textile industry was also experiencing worst energy crisis, leaving it with very little options. He said a demand for cotton consumption can only be generated through ensuring uninterrupted power supply to value-added industry. He said that the value-added industry can sell its products in outside world on account of its ability to produce quality products with a guarantee of timely delivery.
Though the spinners are of the view that a crisis-like situation can only be avoided by having one-off subsidised interest rate of 5 percent on short- and long-term loans until June 30 against all outstanding loans. Further, they are of the view that uninterrupted gas supply to the industry is also must to take the industry out of crisis.