KARACHI, Oct 17: Textile mill owners are seeking “government facilitation” for supply of imported cotton and a reduction of tax to 15 per cent from 20 per cent on imports of polyester fibre.

In case cotton prices show no respite in price escalation, the textile mill owners plan to make a big shift in their consumption pattern and adopt new production strategy, which will bring down their dependence on cotton.

During their meeting with Finance Minister Shaukat Aziz on Thursday afternoon and later on Friday, the textile leaders discussed a few options available to them to tackle cotton scarcity and prices shooting up to new heights. An emergent meeting of the newly-elected managing committee of the All Pakistan Textile Mills Association (Aptma) was held on Friday but no official announcement was made after the meeting nor any formal resolution was adopted.

A brief conversation with the textile leaders after the meeting reveals that Aptma wants the government to announce a long-term price stabilization policy, formation of a high-powered committee including representatives of all the stakeholders on price stabilization, facilitation for import of cotton and provision of a direct subsidy to the farmers.

“We are making a few proposals to our general meeting being held on Saturday at Lahore,” Waqar Mannoo informed Dawn on Friday. He said the managing committee had proposed the general meeting certain strategy for tackling the situation.

But a conversation with the managing committee members on Friday afternoon reveals that the textile mill owners want the government to bear the freight cost of imported cotton. “Aptma never demanded any ban on export of cotton,” Waqar Mannoo emphatically pointed out. “We stick to the policy of duty-free import and duty-free export,” he made it clear.

But the textile mill owners said that for the purpose of providing a level-playing field to those mills who would need imported cotton, the government should provide financial assistance equal to freight charges. Their estimate is that freight charges come from two cents on a pound to six cents a pound depending on the source from where it is coming. Roughly it translates into Rs90 to Rs270 on import of a maund cotton. They are not proposing the import of cotton by any government agency. The textile mill owners are, however, not clear as to how the government could facilitate the cotton import if this job is done by the industry.

For the last five years Pakistan, since 1998-99 to be precise, has been a net importer of cotton and the textile industry imported this item without any apparent official assistance. Pakistan imported 1.31 million bales in 1998-99, 496,000 bales in 1999-2000, 827,000 bales in 2000-01, 1.56 million bales in 2001-02 and 1.10 million bales in 2002-03.

During the last fiscal year, Pakistan imported cotton from 36 countries. The biggest quantity of more than half-a-million was imported from the US.

“We don’t want to be stuck up in refund process,” another textile mill owner explained the justification for demanding a 5-per cent tax reduction on the imports of polyester fibre. On 20 per cent duty, the textile mills need to apply for five per cent refund, which is a long process.

Most of the textile mill owners believe that pest infestation has caused some damage to the cotton crop and it is of course widespread in a few areas, but their private surveys in Rahim Yar Khan, Bahawalpur, Multan, Lodhran and a few other cotton growing districts convince them that damage is not of alarming level.

Aptma believe that pest infestation may cause five to 10 per cent damage to the local crop. What is causing anxiety to them is the escalation in international cotton prices, which is showing no signs of respite.