LAHORE: After a record cotton imports this year, the textile industry has also begun importing yarn on a large scale, it has been learnt.
Sources say that the textile mills imported 66,000 tonnes of cotton yarn in the first four months (July-October) of the ongoing financial year. The volume is equivalent to about 0.45 million bales of cotton.
The industry has already signed agreements for import of 3.5m bales of cotton during the past few months, out of which about 1.2m bales have already reached the country, they say.
It is believed that the country will import more than 6m bales of cotton this year, the highest in its history, because of dwindling local production of the crop.
The sources say that there is also the possibility of importing cotton yarn equivalent to one million bales of cotton this year.
Cotton Ginners Forum chairman Ihsanul Haq says the imposition of 18 percent sales tax on the purchase of local cotton and yarn is making the import of these commodities attractive for the industry because there is no tax on their import.
Quoting US cotton export data, he says that Pakistan has signed import agreements for 146,000 bales of American cotton during the past week, which is the highest cotton import agreement in a week in the country’s history.
He says that despite a record increase in cotton rates in the international markets, Pakistani textile industry is disinterested in the purchase of domestic cotton due to which a downward trend is being seen in the local cotton market to the concern of the growers and ginners.
“Cotton prices have fallen below the level of Rs18,000, while these may decline further,” he fears, urging the government to exempt the domestic cotton crop and yarn from the sales tax to bring it on a par with the imported commodities.
Otherwise, he warns, cotton cultivation may fall further in the country and put extra burden on the foreign exchange reserves to import cotton and yarn from abroad, besides adding to the financial woes of the farming community.
Published in Dawn, December 2nd, 2024
