KARACHI, May 5: The All Pakistan Textile Mills Association (Aptma) has urged the government not to allow the Trading Corporation of Pakistan (TCP) to export its cotton stocks of around 230,000 bales, as the domestic industry is facing a shortfall of around 3.5 million bales.
Aptma vice-chairman Mushtaq Vohra told Dawn on Friday that last week the TCP invited bids from local traders for the export of around 32,000 bales out of its stocks.
“This cotton will ultimately land in the hands of our competitors and the local industry will be forced to import huge quantity to meet the shortfall,” Mr Vohra said, adding that last year cotton production stood at 14.347 million bales and this year a lower crop of 12.394 million had further widened the gap between demand and supply.
He said there was a shortage of two million bales of cotton and the industry had already imported around 1.5 million bales, taking the total shortfall to 3.5 million bales. “It would be against the national interest, if the TCP was allowed to export its stocks at the cost of local industry.”
Mr Vohra pointed out that in Bangladesh around five million spindles ran on imported cotton, out of which 50 per cent was supplied by Pakistan. Against this, Pakistan had 12 million spindles and needed cotton to keep them running, he added. Due to enhanced capacity in spindles, he said, the industry needed around 15 million bales, but the TCP seemed bent on selling the badly needed cotton to the competitors.
Mr Vohra said Aptma on several occasions advised the TCP not to sell its cotton stocks to foreign buyers through local traders, but each time the association was told that it was a decision of the ECC and not of the corporation.
He expressed his surprise at the logic being given by the TCP for preferring sales to foreign buyers and said that local traders, who ultimately export the cotton, quoted their prices in foreign currency whereas the domestic industry offered bids in local currency. “Even in case of a difference in price by Re1 the TCP preferred to sell the stocks to traders who ultimately export them to our competitors in the world market.”
He said actually the state-owned corporation was incurring losses owing to misconception about its price and cost theory. The Aptma vice-chairman said that the actual cost incurred by the TCP on export deals came to around Rs82.50 per maund whereas it was calculating it at Rs30.
Mr Vohra said the TCP suffered a loss of Rs52.50 per maund which was not being accepted by high-ups of the corporation at this stage but would realise at later stage or at the time of audit.
Above all, he said, discrimination was going on against the local industry by allowing only 30 days time for lifting stocks from TCP’s godowns whereas foreign sales were allowed 60 days.
