August 12, 2007	Sunday	Rajab 27, 1428

KARACHI, Aug 11: Autumn is still a few weeks away and the extended monsoon may delay the reaping of two out of three main kharif crops — cotton and sugarcane — but the rich textile tycoons and politically powerful sugar barons are taking positions to bring pressure on the government and growers on price issue.

A firework between the leaders of textile and sugar industries with cotton and sugarcane growers every autumn has now become a regular feature of Pakistan’s business calendar as government seems to be a helpless spectator and consumers are made to pay more.

This year too, the textile and sugar industry leaders are in a war game with the growers. “The ultimate sufferers would be consumers and labourers,” leader of a consumer’s organisation apprehends.

On Friday, the textile tycoons organised among themselves a video communication at the offices of All Pakistan Textile Mills Association (Aptma) in Lahore, Karachi and Peshawar to inform the general public and the government that the mills are considering a 14 days temporary lay off “in the wake of unprecedented rise of cotton prices touching Rs3,500 a maund.”

A press release issued by Aptma on Saturday announced that mills short of cotton would close facilities on August 14 being a festival holiday.

Notwithstanding, the current temporary shortage, the Aptma is looking forward to pick up 14 million bales of cotton from the present crop. There is an apprehension of delayed arrival apparently because of extended monsoons.

For covering this brief shortage period Aptma is asking the government to allow unrestricted import of all types of cotton from India by train and from all ports of entry into Pakistan.

Mills having cotton in excess of their immediate consumption are being asked to sell it to those mills, which need it. The Aptma has set up a facilitation cell to import cotton that is stocked in Middle Eastern transit ports and is currently priced at approximately Rs3,000 a maund and can reach Pakistan within 8 to 10 days.

“For about last two months, textile tycoons were leaking information to media about closure of 150 to 200 mills, as government offered a deaf ear to Aptma demand of giving research and development (R&D) subsidy on yarn export and concession rated loan to spinning,” a market analyst pointed out.

He recalled that for last several years nay a few decades the textile sector pressurised the government with closure of mills, default of loans and unemployment of labour.

Officials in the relevant federal government agencies and provincial government departments are now not ready to buy the Aptma gimmick of two weeks lay-offs and closure of textile mills. “Don’t expect any cash incentive in the textile policy,” remarked an official who made it clear that the textile policy would be a long time affair and incentives, if there are any, will be targeted with linkages.

The sugar barons had much earlier declared to delay the sugarcane crushing in the coming season because the “sugar inventory with them is enough to last till February 2008.”

According to business circles the sugar crushing should commence from October. But by delaying it, the sugar barons, owning among themselves over 75 sugar mills, want to bring pressure on the government as well as on the growers. Delay in crushing means exposure of sugarcane in open, which will reduce sucrose content and hence a drop in the prices.Growers, particularly those, who are well positioned in the political parties, federal and provincial governments and the assemblies and enjoy the support of the federal ministry of food, agriculture and livestock (Minfal) are now proving an equal match to Aptma and PSMA (Pakistan Sugar Mills Association) in the war game for last few years.

Plenty or scarce, sugar prices for the consumers have gone up to Rs30 a kg now,” remarked a market analyst who fear a clash between the millers and the sugarcane growers in an election year may further push up prices to Rs40 a kg and ever more.

Even after getting a warning from World Bank on cartels and syndicates in sugar and cement business, the government is understood to have given up idea of setting up a Competition Commission as its nominated chairman Khalid Mirza was asking for authority to raid the offices of the culprit companies and many other powers that scared the leaders of sugar, cement, textile and other sectors prone to cartelisation.

The Monopoly Control Authority continues to exist as a toothless and an ineffective regulator that issues orders and penalties on cement, sugar and textile companies at the rate of Rs100,000. In many cases, the owners and directors of the culprit companies even do no bother to attend the proceedings.