Interviews
FPCCI shows reaction on cotton export
01 Aug '08
2 min read
Mr. Tanvir A. Sheikh, President, Federation of Pakistan Chambers of Commerce and Industry has strongly reacted on the news that Pakistan would export 50,000 short staple cotton bales in 2008-09.
He said that country would earn only Rs. 1 billion by export of 50,000 cotton bales, but we can earn more than Rs. 6 billion by using this cotton to make intermediate textile product - yarn and grey fabrics. These earning can be increased more than Rs. 20 billion by making finished textile products.
Mr. Tanvir A. Sheikh mentioned that Pakistan's annual production of cotton is about 11.5 million bales and country's annual requirement stands at 16 million bales leaving a shortfall of over 4 million bales. It is also notable that about 1.6 million bales were imported from India last year.
He demanded that the government must immediately impose ban on export otherwise textile industry of Pakistan will face severe problems. In the last fiscal year, we observed decreasing trend in the textile sectors. One of the major reasons of this declining was shortage of raw cotton in the country.
If government does not take this matter seriously then it will become very difficult for us to achieve export target of $22.1 billion in this year. The permission to allow export of cotton is not at all in the interest of the country, as the local price of cotton which used to be available at Rs 2,700 to Rs 3,000 per maund has surged to a price of Rs 4,200 per maund.
Mr. Tanvir A. Sheikh said that we were hoping that government would impose ban on export of cotton in the trade policy 2008-09 but trade policy was silent on this issue. It indicates that government is not interested to provide safeguard to textile sector, which is the backbone of the country and has potential to reduce the gap of trade deficit.
Despite of various problems like high utility charges, energy shortage, high cost of capital and lack of infrastructure, textile sector is still contributing more than 60 percent in the country's total export. The export of cotton from Pakistan at this stage is tantamount to destruction of textile industry. Instead of providing relief to textile sector, government policies are continuously creating more problems.
He said that country would earn only Rs. 1 billion by export of 50,000 cotton bales, but we can earn more than Rs. 6 billion by using this cotton to make intermediate textile product - yarn and grey fabrics. These earning can be increased more than Rs. 20 billion by making finished textile products.
Mr. Tanvir A. Sheikh mentioned that Pakistan's annual production of cotton is about 11.5 million bales and country's annual requirement stands at 16 million bales leaving a shortfall of over 4 million bales. It is also notable that about 1.6 million bales were imported from India last year.
He demanded that the government must immediately impose ban on export otherwise textile industry of Pakistan will face severe problems. In the last fiscal year, we observed decreasing trend in the textile sectors. One of the major reasons of this declining was shortage of raw cotton in the country.
If government does not take this matter seriously then it will become very difficult for us to achieve export target of $22.1 billion in this year. The permission to allow export of cotton is not at all in the interest of the country, as the local price of cotton which used to be available at Rs 2,700 to Rs 3,000 per maund has surged to a price of Rs 4,200 per maund.
Mr. Tanvir A. Sheikh said that we were hoping that government would impose ban on export of cotton in the trade policy 2008-09 but trade policy was silent on this issue. It indicates that government is not interested to provide safeguard to textile sector, which is the backbone of the country and has potential to reduce the gap of trade deficit.
Despite of various problems like high utility charges, energy shortage, high cost of capital and lack of infrastructure, textile sector is still contributing more than 60 percent in the country's total export. The export of cotton from Pakistan at this stage is tantamount to destruction of textile industry. Instead of providing relief to textile sector, government policies are continuously creating more problems.
Federation of Pakistan Chambers of Commerce and Industry
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