Cotton import must for local industries to continue spinning

LAHORE: Government needs to allow cotton imports from across the border to benefit the textile sector across the board as the current policy is mostly benefitting hoarders.

In the past, the government allowed free import and export of cotton. And when the spinners tried to exploit farmers, exporters would jump exports. This ensured fair prices for the farmers. The changed policy now benefits mostly ginners.

Cotton is the major raw material for local spinners. Its availability at fair price makes things easier for them. However, declining production over the past decade has compounded the woes of the textile sector.

In the last six years, cotton growing area in Punjab declined by 30 percent, its production dived by 38 percent, while per hector yield fell by 11 percent. This has forced spinners to import cotton, which has increased their expenses, especially in the past three years.

Cotton is harvested at almost the same time in both India and Pakistan. The prices are on the lower side when harvesting is at its peak. It is prudent to import cotton at that time. The government however, clamps restriction on its imports fearing that domestic cotton farmers would be exploited.

The sensible solution in this regard is to restrict the quantity of cotton that could be imported till the domestic stock is exhausted. Statistics show that Pakistan imports two to 2.5 million bales every year. The government could allow import of half this quantity without any restrictions and the remaining if required after the domestic stock is exhausted. This would provide relief to the spinners.

Punjab in 2011/12 accounted for over 80 percent of the total cotton production in the country; its share has dropped to 60 percent in 2016-17. The decline in production has been constant in Punjab.

On the other hand, cotton growing area in Sindh has regularly increased since 2011/12. According to the statistics of Pakistan Central Cotton Committee, the country produced 13.59 million bales of cotton in 2011/12. Out of this 11.13 million bales were produced in Punjab and 2.35 million in Sindh.

Cotton was cultivated in Punjab on 2.53 million hectares while in Sindh it was grown on 259,000 hectares in 2011/12. Per hectare yield of the crop was 757 kilogram in Punjab and 1,546 kilogram in Sindh.

The cotton production nosedived to 9.76 million bales in 2015/16 with Punjab producing only 6 million bales and Sindh contributing 3.766 million bales. The cotton cultivation area that year was 2.864 million hectares. In 2015/16, the per hectare cotton production declined to lowest ever in three decades to only 421kg per hectare.

The productivity in Sindh also decreased to 939kg per hectares. This was way down than the production of 1,546kg per hectare achieved in 2011/12. In 2016/17, cotton production inched up to 10.72 million bales. It was still very low and production recovery of 664kg per hectare in Punjab was better than slight recovery of 1,012kg per hectare in Sindh.

In the current year, government continues to insist that cotton production would be according to the target of 12.5 million bales. However, up till mid-January only 11.3 million bales have reached the market.

The farmers have no cotton with them. We cannot expect arrivals of more than 200,000 to 300,000 bales. It is high time the bureaucracy issues the federal cabinet the approved notification to allow cotton imports from the Wagah border.