ISLAMABAD: The Ministry of Commerce is ready on Thursday to support the imposition of a regulatory duty (RD) on the export of cotton yarn, aimed at encouraging added value in Pakistan.

Senior officials from the Ministry of Commerce showed this willingness in an informal conversation following a formal meeting of the National Assembly panel which met with MK Khurram Shahzad for the presidency.

“Pakistan exported cotton yarn worth $ 1 billion in 2020-21 to various countries, including China. If this thread had been used to add value, Pakistan could have exported value-added products, ”said Muhammad Ashfaq, Assistant Secretary (Tariff Policy) at the Ministry of Commerce.

He suggested that the National Assembly panel recommend the imposition of a duty / RD on the export of cotton yarn, adding that the Commerce Ministry would support the proposal.

His views were also supported by Additional Secretary (Trade Diplomacy) Syed Hamid Ali, who said the Commerce Ministry would approve the proposal.

Khurram Shahzad MNA argued that the $ 1 billion cotton yarn could make $ 14 billion worth of fabrics that could be exported instead of just exporting cotton yarn.

A team from the All Pakistan Textile Mills Association (APTMA) led by its president, Rahim Nasir, noted that textile exports are expected to reach $ 21 billion in 2021-2022; and that cotton production will exceed 8.5 million bales this year because the harvest is better than before.

APTMA President said Pakistan should opt for corporate agriculture to get better returns, as is done in other countries, adding that there should be consistency in policies. He said cotton production has declined over the past 15 years. Pakistan’s cotton production per acre is lower than that of neighboring and developed countries, he added.

The meeting was informed that APTMA has established a Cotton Foundation to develop better quality cotton seeds, as the yield of other countries is much higher than that of Pakistan. The Foundation will develop cotton that will be virus-free and also in accordance with local climatic conditions. Technology will also be imported for this purpose.

APTMA consultant Dr Javed commented: “I have visited several cotton fields and met farmers. Those who use pesticides from multinational companies get better yields, while those who use local pesticides or counterfeit seeds face substantial losses.

The president of APTMA did not support the imposition of the DR, saying that if the support is extended to one industry at the expense of another industry, it will not succeed.

“The policy must be formulated in such a way as to reduce the cost of production. We have to make a coherent chain, ”he argued.

The panel organizer said unprecedented incentives have been given to exporters, but exports are not increasing.

Chairman APTMA responded that textile exports grew 28 percent year-over-year while they were 45 percent higher month-over-month.

He said, 28 percent growth is a very good number and if someone thinks the growth should be 50 to 60 percent, that’s not possible. He said the availability of energy would have to be equal across the country to maintain an equivalent cost.

The impact of the Temporary Economic Refinancing Facility (TERF) will be visible in the years to come as the industry only grows, the panel noted.

Khurram Shahzad raised the issue of tariff protection for some chemical industries.

National Tariff Commission (NTC) chairperson Robina Khalid said protection for this will be gradually reduced.

The panel decided to invite officials from the Ministry of National Food Security and Research and agricultural scientists to its next meeting for a full seed briefing.

Besides others, the meeting was attended by MPs Syed Javed Ali Shah Jillani and Sajida Begum.

Copyright Business Recorder, 2021

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