Pakistan has to import over 4 million cotton bales that would cost around $1.5 billion, owing to declining production of cotton this season, sources revealed to Business Recorder. Officials said imports of such a large quantity would not only increase the country's import bill, but also the cost of production. Currently customs duty, additional custom duty and sales tax have been imposed @ 3 percent, 1 percent and 5 percent respectively on the import of cotton.
Pakistan has produced around 10 million bales of cotton on average for the last several years against consumption of over 14 million bales. Additionally, 1 to 1.5 million bales of Extra Long Staple (ELS) cotton per annum is also imported, as this quality is not produced in the country.
Cotton Commissioner Dr Khalid Abdullah said that as of 1st November 7.706 million bales of cotton have arrived against 8.134 million during the same period of last year i.e. a decline of 0.428 million bales -5.26 percentage decline.
Seed cotton in Punjab in the current season declined by 8.3 percent to 4.27 million bales as against 4.658 million bales during the previous season. Seed cotton arrival in Sindh recorded at 3.434 million bales in the current season showing a decrease of 1.2 percent as compared to 3.476 million bales last year.
Most of the farmers in Punjab and Sindh have started cutting their cotton crop and are preparing their lands for sowing of wheat crop, an official told this correspondent and added that the situation is not satisfactory and the production will be very far behind the target.
The Cotton Crop Assessment Committee (CCAC) has revised downward cotton production target by around 25 percent i.e. to 10.847 million bales against the initial target of 14.37 million bales set for the current season 2018-19, after missing the sowing target by over 8 percent.
The official said that the country had missed cotton sowing target by over 8 percent due to extraordinary shortage of water. Cotton was sown on 6.632 million acres against the target of 7.28 million acres. Sources said that due to increased sugarcane cultivation in the cotton areas, delay in harvest of wheat and shortage of water were factors that contributed to a decline in cotton sowing.
The government fixed cotton area and production target for the year 2018-19 was as follows: Punjab was expected to cover 5.70 million acres and to produce 10 million cotton bales, Sindh had to cover 1.53 million acres and produce 4.2 million cotton bales, Balochistan had to cover 0.074 million acres and produce 0.15 million bales and Khyber Pakhtunkhwa had targeted to sow cotton on 0.005 million acres and produce 0.02 million bales of cotton.
The decline in cotton sowing was recorded in Sindh which is the second major cotton producing province. Sindh has covered 0.973 million acres in the current season against the target of 1.53 million acres and missed the target by around 35 percent. Sindh province produces around 32 mounds of seed cotton per acre compared to 21 mounds in Punjab.
The target for cotton seed sowing for 2018-19 in Punjab was 5.7 million acres and the sowing was on area of 5.65 million acres. Extraordinary shortage of water during the Kharif season, has badly affected the cotton sowing in early season. However, in Punjab, 99% of sowing target was achieved, whereas in Sindh, only 64% of the target area could be sown.
According to the revised estimates, Punjab is projected to produce 8.077 million bales, Sindh 2.6 million bales, Balochistan 0.150 million bales and Khyber Pakhtunkhwa 0.020 million bales. Officials said that sugarcane crop has overtaken the cotton rich areas of the province including Rahim Yar Khan, Rajanpur, Muzaffargarh and Lodhran, which is another reason for decline in cotton areas.
Further there is low investment in seed quality in Pakistan and measures need to be taken to give incentives to international companies to invest in Pakistan. Due to uncertified cotton seeds production is being affected every year. During a presentation given to Advisor to Prime Minister on Commerce, Textile Industry and investment Razzak Dawood, textile division listed several reasons for not achieving the targets which include lack of skills development, infrastructure, product and market diversification, compliance, cotton standards, cluster development, cost of doing business & ease of doing business, combined effluent treatment plant, revitalization of textile and garment cities, unnecessary import of textile goods, increase in cotton yield and production of long staple cotton, SME development, pending liabilities, tariff rationalization and regulatory regime.
Textile division has proposed very ambitious plans including introduction of latest seed technology, improving cotton staple length, up-gradation of ginning machinery, cotton standardization, introduction of hedge trading, research and development grant fund for new and existing markets, introduction of new fibers, new products and new blends.