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Energy crisis hits cotton production

Although Pakistan is heading towards a bumper cotton crop of 15 million bales, the textile entrepreneurs will not be able to process it due to acute energy shortages, said sources on Monday.

Chairman All Pakistan Textile Mills Association (APTMA) Ahsan Bashir said that there is unlimited demand for Pakistani yarn in the global market, but the industry has failed to fulfill demand due to 25 percent capacity closure on account of energy crisis and high mark up. Besides, he added, the surviving units are operating below capacity due to insufficient power and energy supplies.

“Some vested interests have spread false news of lower cotton production this year, which has increased raw cotton prices above global prices,” he regretted. This, he added, has forced the industry to import cotton from India that costs Rs200 per maund less than the local cotton.

“To date about two million cotton bales have been booked from India,” he said. “This additional cotton means that there will be 17 million bales available in the market for processing.”

Given the prevailing power supply, the industry can hardly process 13.5 million bales into yarn. “We can process the entire 17 million bales and export it as yarn and fabric provided our energy needs are addressed,” he said, adding that it will earn the country an additional foreign exchange of $4-5 billion and the employment situation will also improve.

Chairman APTMA Punjab Shahzad Ali Khan said that in its latest meeting, Pakistan Cotton Advisory Committee, forecasted that the country will reap a harvest of 14.5 million bales. However, he added, according to the Pakistan Cotton Ginners Association, more than 8.5 million cotton bales have been received by them till November 15, 2012. “Last 10 years’ historical average reveals that 57 percent of cotton reaches local markets by November 12 every year,” he said. “Based on this historical average, Pakistan will harvest 14.945 million bales during this season.”

“This is a positive sign for both farmers and industry as Pakistan’s dependence on imported cotton will be eliminated,” he claimed. “Besides, this is also a wakeup call for the planners to ensure sustained supply of gas and electricity in Punjab, which accounts for 75 percent of the yarn making capacity in Pakistan.”

“The concept of the free market economy has provided a level playing field to both spinners and farmers,” said Shahid Mazhar, a leading spinner. “After the opening of trade with India, spinners can import cotton though Wagah border within 15 days.” Another advantage is that even low quantities of 300 bales can be imported at a time, he added. According to Mazhar, local ginners will have to keep lint rates at the global rates to discourage cotton imports. This, he added, will benefit the farmers as well.

Wisal Monnoo, whose family has the largest number of spinning units in the country, said that Pakistani spinners prefer using local cotton. “There is unlimited demand for yarn produced from Pakistani cotton in China,” he added. He appealed to the government to give priority to the industry in view of energy supply to ensure economic growth in the country.

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