Saturday September 25, 2021

Intervention price for cotton fixed at Rs5000/40kg

August 05, 2021
Intervention price for cotton fixed at Rs5000/40kg

ISLAMABAD: The government has approved cotton intervention price of Rs5,000/40kg for cotton crop 2021-22 in bid to encourage farmers to revive the shrinking crop, country’s top agriculture executive said on Wednesday.

“In the event the price drops from this level, the state-run TCP (Trading Corporation of Pakistan) will procure it from farmers in order to revive cotton output,” said Minister for National food Security and Research Syed Fakhar Imam in a news briefing.

Imam said the government had approved this intervention price to encourage local farmers by ensuring profitability, protection from exploitation as to cultivate more cotton. For the last several years, cotton production is on the decline. Due to shortage, the country’s textile sector had to import 5.04 million bales.

The federal cabinet in its latest meeting has approved this seed cotton (Phutti) price. “Ministry will constitute a ‘Cotton Price Review Committee’ which will monitor cotton price in the country.”

Minister said under the intervention regime, the committee would direct the TCP to start procurement if price fell below Rs5,000 per 40 kg, adding that TCP would initially procure 200,000 bales of cotton and ensure farmers were directly benefiting from the procurement campaign. Federal minister said the procurement would be set as 90 percent of the import parity price (IPP).

Empirical evidence indicates that in Pakistan, cotton production increased during intervention years. Cotton area and yield has increased during TCP intervention period — 1998-2010 —and decreased during the period without intervention — 2011-2020.

Pakistan’s cotton sowing season starts from mid-March to mid-July according to core and non-core areas. It must be noted that cotton picking starts from October to mid-January.

Imam said fixation of cotton intervention price was also aimed at bringing stability in local cotton sector, besides ensuring fair prices of the produce in line with international prices to supply quality input, particularly seed and cotton pesticides.

He said the cotton revival plan of the current government was also envisaged to grading and standardisation of local cotton for promoting local spinning and ginning and harmonising them with the international market for enhancing local exports of garments. “The government has also initiated collaboration with China and Korea for technology transfer and research development in the seed sector,” he said.

Cotton is the mainstay of Pakistani economy and the lifeline of the textile sector. It earns valuable foreign exchange through its exports. Over the last several years, cotton production is declining.

The sector has over 400 textile mills, 1000 ginneries and 300 oil expellers. The textile industry provides livelihood to millions of farmers, labourers and those employed alone the entire cotton value chain. In 1980, China’s textiles exports were $14 billion, India $12 billion, Pakistan one billion, Bangladesh and Turkey $0.5 billion each. Now China is the world’s biggest textile exporter and market. Its exports of textile and garments have crossed $300 billion. India is the second largest exporter with $36 billion of textiles and apparels exports. Bangladesh has crossed the $32 billion mark while Turkey touched $29 billion.

Pakistan’s exports are almost static for the last several years and in fiscal year 2020/21, its exports stood at $14.4 billion.