KARACHI: All Pakistan Textile Mills Association (Aptma) has opposed the re-imposition of custom duty on import of cotton.
Aptma Senior Vice Chairman Zahid Mazhar said the custom duty of three percent and additional custom duty two percent on import of cotton with effect from July 15, 2018 was the last nail in the coffin of the ailing textile industry.
He said as per final statistics of cotton arrival released by Pakistan Cotton Ginners Association on May 1, 2018, only 11.58 million bales of 155 kilogram were produced in 2017-18, whereas 10.73 million bales and 9.79 million bales were produced in 2016-17 and 2015-16, respectively.
“So, three seasons in a row cotton crop has been below the target,” the Aptma official said. “This contradicts the cotton commissioner’s claim that Pakistan produces 13 million bales annually, on the basis of which the government has re-imposed custom duty and additional custom duty on import.”
He said firstly the area under cotton cultivation has witnessed a decline over the last few years since a high percentage of cotton growers have shifted to sugarcane. Secondly, the crop has declined as cotton yield in Punjab has declined to the lowest, which needs to be addressed urgently.
As per Pakistan Central Cotton Committee’s Report this year, Sindh failed to cultivate 48 percent of the cotton cultivation area due to scarcity and poor management of water, he added.
He further said that due to the imposition of custom duty and sales tax on import of raw cotton, import of finished cotton yarn has witnessed 500 percent increase in 2016-17 as compared to 2011-12.
“This policy instead of supporting manufacturing of cotton yarns in Pakistan is rather helping the yarn manufacturing industry of other countries competing with us,” the senior vice chairman said.
Due to the high cost of doing business and inadequate supply of raw cotton almost 140 textile mills have already closed their operations resulting in a loss of one million jobs. “Further, around 75 to 80 mills are on the verge of closure which will add another 0.5 million to the unemployment figure,” the Aptma senior vice chairman said.
According to the official, Pakistan’s textile exports are suffering a loss of more than $4 billion per annum due to the closure of about 140 mills and the mills operating under capacity.
He demanded the government to make serious efforts in increasing the size of the annual cotton crop to 20 million bales following the example of India. This on the one hand will boost farmers’ income and on the other hand reduce input costs of all the segments of the textile economy, which will facilitate high growth in exports.