September 24, 2021

Cotton yarn export MoC says ready to support RD imposition.

Commerce Ministry on Thursday is ready to support imposition of Regulatory Duty (RD) on export of cotton yarn, aimed at encouraging value addition in Pakistan.

Senior officials of Commerce Ministry showed this willingness in an informal chat subsequent to a formal meeting of National Assembly’s panel which met with Khurram Shahzad MNA in the chair.

 

“Pakistan exported cotton yarn worth $ 1 billion during 2020-21 to different countries including China. If this yarn had been used for value addition, Pakistan could have exported value-added goods,” said, Muhammad Ashfaq, Joint Secretary (Tariff Policy) Ministry of Commerce.

 

He suggested that National Assembly panel should recommend imposition of duty/ RD on export of cotton yarn, adding that the Commerce Ministry will support the proposal.

 

His views were also supported by Additional Secretary (Trade Diplomacy) Syed Hamid Ali, who stated that Commerce Ministry will endorse the proposal.

 

Khurram Shahzad MNA argued that cotton yarn worth $ 1 billion could manufacture cloth of $14billion which could be exported instead of exporting only cotton yarn.

 

A team of All Pakistan Textile Mills Association (APTMA) headed by its Chairman, Rahim Nasir noted that textile exports are likely to touch $ 21 billion during 2021-22; and that cotton production will be over 8.5 million bales this year as the crop is better than before.

 

Chairman APTMA said that Pakistan has to go for corporate farming to get better yield as is being done in other countries, adding that there should be a consistency in policies. He said cotton production has been declining for the last 15 years. Cotton production per acre in Pakistan is less than in the neighbouring and developed countries, he added.

 

The meeting was informed that APTMA has established a Cotton Foundation to develop better quality cotton seeds as the yield of other countries is far higher than Pakistan. The Foundation will develop cotton which will be virus-free and also in accordance with local weather conditions. Technology will also be imported for this purpose.

 

APTMA’s Consultant, Dr. Javed commented: “I have visited several cotton fields and met with farmers. Those who use pesticides of multinational companies are getting better yield, whereas those who use local pesticides or counterfeit seeds are facing substantial losses.”

 

Chairman APTMA did not support the imposition of RD, saying that if support is extended to one industry at the cost of another industry, it will not succeed.

 

“Policy should be formulated in such a way that the cost of production is reduced. We have to make a consistent chain,” he maintained.

 

The Convener of the panel said unprecedented incentives have been given to the exporters but exports are not increasing.

 

Chairman APTMA replied that textile exports have posted growth of 28 per cent on year to year basis whereas they were 45 per cent higher on month-to month basis.

 

He said, 28 per cent growth is a very good number and if someone thinks growth should be 50 to 60 per cent, it is not possible. He said energy availability should be at par across the country to keep cost equivalent.

 

The impact of Temporary Economic Refinance Facility (TERF) will be seen in years to come as the industry is just going for expansion, the panel noted.

 

Khurram Shahzad raised the issue of tariff protection to a couple of chemical industries.

 

Chairperson National Tariff Commission (NTC) Robina Khalid said that protection of this will be reduced gradually.

 

The panel decided to invite officials of Ministry of National Food Security and Research and agriculture scientists in its next meeting for a comprehensive briefing on seeds.

 

Besides others, the meeting was attended by Syed Javed Ali Shah Jillani MNA and Sajida Begum MNA.