| November 11, 2003 | Tuesday | Ramazan 15, 1424 |
Water committee make-up disputed
OVER 10,000 powerlooms have become idle and thousands of workers rendered jobless, besides a setback to the exports of cotton fabrics, due to a cotton crisis.
The cotton crisis caused by the abrupt increase in prices of cotton and polyester yarn in the wake of a sudden jump in prices of raw cotton has now started taking a new turn. It is causing a slump in agricultural production, slowing down industrial growth, affecting export and increasing the import bill. Cloth exporters, yarn dealers, owners of textile units and other ancillary traders are of the view that if remedial measures are not taken by the government, the $8 billion export trade of textile products may be put in jeopardy.
The government has decided to lower its cotton production target to 10 million bales from 10.5 million bales, admitting the serious consequences of pest attack on the cotton crop. Insiders claimed the new target, too, was overambitious, and that the final estimate could well be around nine million bales. The escalation of cotton price to an all-time high of Rs3,600 per 40kg had rendered export of textile products incompetitive.
About eight or 10 big textile groups controlling about 2.2 to 2.4 million spindles went in for massive buying of cotton when farmers in a few districts of southern Punjab raised their demand for cotton seed to Rs1,000 per 40kg from Rs700 per 40kg in early October. The current cotton seed price is reported to have touched Rs1,600 per 40kg, coming down to Rs1,300 per 40kg.
Top seven trade bodies of the country have expressed the apprehension that in case the government fails to take suitable remedial measures to check the unprecedented hike in cotton price, it will adversely affect the export performance of the textile processing sector, besides export of garments and home-textiles, and deprive the national exchequer of the forex and revenue worth billions of rupees and render scores of daily-wagers jobless.
The Faisalabad Chamber of Commerce and Industry, All-Pakistan Cotton Powerlooms Association, Pakistan Yarn Merchants Association, All-Pakistan Cloth Exporters Association, All-Pakistan Textile Processing Mills Association, Pakistan Hosiery Manufacturers Association and All-Pakistan Sizing Industries Association, in separate ‘SOS calls’ to President Gen Pervez Musharraf, Prime Minister Zafarullah Khan Jamali and Commerce Minister Humayun Akhtar have demanded that the government should introduce a realistic and pragmatic policy to stabilize the upsurge in cotton prices and avert such crises in the foreseeable future. FCCI president Aftab Ahmad expressed concern over the escalating price of phutti and cotton yarn and termed it detrimental to the textile sector and export. He claimed a number of textile units especially garment factories, powerlooms, sizing, dyeing and other ancillary units had become idle and a good number of textile units were on the verge of closure.
He said there was no reasonable increase in the prices of garments and cloth in the international market because China, India and Indonesia were still supplying fabrics at old rates. The exporters of these countries were fetching orders for the supply of cloth from the main entrepreneurs of America, Bangladesh, Sri Lanka, Morocco and Kenya at the previous rates due to which our value-added exports were decreasing day by day, he said.
APCEA chairman Ahmad Kamal termed the price-hike detrimental to the export target of $12 billion for the current year. Yet another aspect of the problem was that the export markets had become very sensitive and the buyers immediately shifted orders to other countries if the suppliers from one country were unable to fulfil their commitments, he said.
He said the authorities should realize the gravity of the situation and firmly control the prices of raw cotton. He said exporters would not be in a position to fulfil their commitments if they were unable to purchase raw cotton at reasonable prices.
PYMA chairmen Ashraf Gandhi and Munawwar A. Shaikh said yarn dealers had been facing financial problems due to a speculative business in the markets owing to increase in the prices of cotton yarn and phutti. They proposed that the government should reduce the cotton prices and impose a ban on its export to strengthen the local market otherwise the cloth merchants, yarn dealers and even big exporters would be left with no option, but to suspend their business activities.
APTPMA chairman Shaikh Mohammed Amjad proposed that pest-free cotton seed and insecticides of international standard be provided to growers. He said the sales tax on cotton should either be abolished or reduced to a maximum of five per cent. Ratio of export rebate, according to him, should be enhanced and brought at par with that of the competitor countries. He said a compensatory rebate should be allowed to the value-added sector for a period of six months, while the cotton import be allowed from India, China and Central Asian States subject to strict quality control and periodic monitoring of stock at home.
APCPA chairman Rana Mohammed Ikhlaq said the exporters preferred to fulfil their commitments instead of making fresh orders to powerloom owners for the preparation of grey cloth due to which owners of small powerloom units were left with no option but to close their factories. The high prices of cotton yarn have forced the owners of small units to close their factories because they were not in a position to purchase yarn at heavy prices to fulfil their commitments of supplying grey cloth to the exporters. PHMA chairman Khurram Tariq has demanded that the government should call a round-table conference of all trade bodies of the country as well as the government high-ups concerned for a solution to the cotton crisis. He said contradictory statements were being issued by the growers and ginners to confuse the already confounded situation. New contracts for the export of cotton and yarn should not be registered and the concept of value addition should be given preference and priority. If the government allowed import of cotton, it should allow import of yarn as well, he said.
APSIA chairman Mirza Mohammed Shafiq said a strong mafia of speculators was creating artificial shortage of cotton yarn in the market. A number of textile ancillary units were on the verge of closure while scores of small powerlooms and sizing factories had already been closed down, he said.
According to the growers, a major chunk of their crop had been destroyed by pests. They tried their best to save their crops by spending a huge amount on spray but could not get any relief due to the availability of poor quality and spurious pesticides. The devastation of the cotton crop was a failure of the managers of agriculture. This tragic end of a bumper crop needed to be investigated, they said.
They proposed that the time had come to restructure the agricultural system particularly in terms of availability and prices of inputs and the prices and mode of purchase of crops. This revamping must not be done on the conditions and recommendations of the IMF and the World Bank as was done in the past, they said.
COMMENTING on the changes made in the make-up of the technical committee on the water issue, Kawish writes that its formation was aimed at seeking an end to the controversy on the dam issue but the changes have turned the body into a disputed one.
When President Gen Pervez Musharraf had come to Karachi to evolve a consensus on the dam issue, the daily recalls, agriculture and water experts of Sindh had raised objections over the greater Thal canal and Kalabagh dam. As a result, the president announced that a technical committee would be formed to seek recommendations on the projects and other aspects of the water issue.
As the committee was to be headed by an irrigation expert, A. G. N. Abbasi, the paper adds, it was believed that it would include neutral members. However, after a lapse of two and half months, it has been announced that the Wapda and irrigation department officials will be taken on the committee, which has raised a question about its impartiality.
Kawish says that Wapda’s role in the water issue and the figures of water availability presented by it have always been controversial. As a result, Sindh firmly believes that Wapda is a party to the water issue. Similarly, the irrigation officials always endorse the government’s point of view.
Welcoming the prime minister’s hope that the National Finance Commission will be able to meet before Eid, Ibrat writes that the issue of the distribution of the divisible pool between the federation and the provinces has been lingering for several years. As a result, the provinces feel that they are short of funds and cannot carry out development work.
Moreover, the daily argues, the present formula of sharing of the divisible pool on the basis of population has also been opposed by smaller provinces, particularly Sindh which believes that it does not get funds according to the revenue it generates. As a result, the province has fallen prey to a rising graph of poverty which is forcing its people to commit suicides in despair.
Ibrat concludes that it should be ensured that the NFC meeting is immediately held and also that its decision removes the sense of deprivation prevailing among the smaller provinces,
Referring to the reports of damage caused to the Moenjodaro structures by the recent rains, Awami Awaz writes that after the dissolution of the Moenjodaro Preservation Authority, preservation work on the archaeological site has been stopped for a couple of years. It has led to the crumbling of the structures and the monsoon rains have accelerated the process.
The daily says that the situation calls for immediate steps to repair the damaged structures and chalk out a strategy to preserve the world heritage site.
Tameer-i-Sindh deplores the shortage of doctors in the Naushahro Feroze Civil Hospital and hospitals in other district headquarters in Sindh and urges the provincial heart department to remove the shortage.