APTMA urges cotton export to India be put on hold

The Dollar Business Bureau

All Pakistan Textile Mills Association (APTMA) has asked its government to stop exporting cotton from Pakistan to India. The industry body is urging to protect the interests of Pakistan textile industry.

Cotton exports to India without determination of the crop size for FY 2016-17 will hurt the textile industry in Pakistan, APTMA Chairman Tariq Saud said. The industry has already been burdened with 35% decrease in cotton crop production in the country during FY 2015-16. Due to this, it has been importing more than 4 million bales of cotton for its domestic consumption, he said.

Cotton cultivation in Pakistan is expected to decline around 25% in FY 2016-17. This will ultimately result in low crop produce in the country. To provide a level playing field, the government should waive 3% customs duty on cotton imports. Or else, the raw cotton exports should be stopped until the crop size is determined for the next season, he demanded.

If the government of Pakistan continues to allow cotton exports, the local textile industry will be forced to import cotton from other countries, according to an industry official. The government should at least withdraw the customs duty on cotton imports to stay competitive, he said.

As per a report, few ginners have signed pacts with cotton importers from India. If the Pakistan government doesn’t intervene, more such agreements will be signed. This may hurt the textile exports of the country in the next financial year. There lies no meaning in doing import and export of the same item (cotton) at the same time, he said criticising the government.

Pakistan government has levied 1% duty on cotton imports during the budget for FY 2014-15 and added another 1% in the 2015-16 budget. An additional 1% import duty in November 2015, takes the duty to 3%. This is a heavy burden on the already weak cotton market of Pakistan. The Pakistan Senate Standing Committee on National Food Security and Research has suggested a ban on cotton imports from India.

India has an excess of cotton crop for over a period of one year. It is importing cotton to pile up its reserves as the next harvest season will be affected by low cultivation and pest attacks, as per analysts.