KARACHI: Cotton prices saw an increase after some volatility. Undue pressure from government sources to buy cotton at the government-fixed intervention price of Rs 8,500 per 40 kg resulted in a crisis in the cotton market, as ginners decided to shut down their factories.
The Pakistan Cotton Ginners Association (PCGA) has demanded the government to prepare a clear strategy to buy cotton and oil at government-fixed prices and immediately remove the illegal tax on banola and also solve the problem of electricity. Cotton farmers will be in trouble in the confrontation between the government and the ginners. Cotton crop will also be affected.
Senator Seher Kamran said that the government should intervene and take steps to protect the interests of cotton farmers.
On the instructions of former President Asif Ali Zardari, the Sindh government has issued a notification to fix the intervention price of footi at Rs 8500 per 40 kg.
After unusual volatility in cotton prices during the last week, the local cotton market remained steady as cotton farmers and ginners started panic selling during Eidul Azha holiday, leading to an unusual fall in cotton prices. Cotton prices fell to a low of Rs 16,000 to Rs 16,200 per head. But the price correction continued at the beginning of the week under review. Finally, the price of cotton started rising from Wednesday evening. Cotton rates in Sindh ranged between Rs 17,000 to Rs 17,300 per head, while cotton rates in Punjab ranged between Rs 17,500 to Rs 17,700 per head.
On the other hand, on Wednesday, the DC of Sanghar district of Sindh province, the country's largest producer of cotton, directed ginners to buy cotton at the government-fixed price of Rs 8,500 per 40 kg. Ginners refused to buy footy at the price announced by the government.
As a result, cotton farmers panicked and trade came to a standstill. In some ginning factories, local police even pulled out trolleys ready to deliver the cotton.
The rate of cotton in Sindh ranges from Rs 17,000 to Rs 17,300 per head. The rate of footi is between Rs 7,000 to Rs 7,300 per 40 kg. The rate of cotton in Punjab is between Rs 17,500 to Rs 17,700 per head, while the rate of foot is between Rs 7,200 to Rs 7,700 per 40 kg. Cotton rates in Balochistan range from Rs 17,000 to Rs 17,200 per head and cotton between Rs 7,200 to Rs 7,600 per 40 kg. The prices of cottonseed, khal and oil remained stable.
The spot rate committee of the Karachi Cotton Association reduced the spot rate by Rs 500 per head and closed it at Rs 17,000 per head.
Naseem Usman, president of the Karachi Cotton Brokers Forum, said that the price of cotton fluctuates in the international cotton market. According to the USDA's weekly export and sales report, the sales for the year 2022-23 stood at one lakh ninety nine thousand two hundred bales.
It was unanimously decided in the meeting that the cotton growers would suspend the purchase of cotton across Pakistan. Repeatedly the promises made by the government are not being fulfilled, the latest example of which is the sales tax notice on Banola and Rs.8500 support (intervention) price. Since the rate has gone below Rs 8500, the government has not yet formulated any policy on cotton procurement.
At present, farmers are being paid at the rate of Rs 7,200 for 40 kg of fruit, which does not cover the cost of cultivation due to rising prices of diesel, fertilizers, seeds, pesticides and other related inputs. Due to which the production cost has increased a lot.
Since this issue is critical to the stability of agriculture and the economy, it is of top priority to identify and understand policy lapses and take timely corrective measures. The government should intervene and take measures to protect the interests of the farmers and make arrangements for direct purchase from the farmers. Otherwise, Pakistan will turn from a cotton growing/exporting country to a net cotton importing country.
Ehsan-ul-Haq Member Central Executive Committee PCGA presenting the position of cotton ginners in connection with the meeting of District Cotton Management Committee said that due to suspension of cotton purchase by ginners in Sindh in particular and Punjab in general a huge cotton There is a crisis. This is being seen and both farmers and cotton ginners are very worried.
The main reason for this crisis is the sudden collapse of the cotton markets a few days ago, during which cotton prices fell by Rs 2,000 per head to Rs 16,500 to Rs 17,000 per head. There has also been an extraordinary reduction in the prices of footi and its prices have come down to Rs 6,500 to Rs 7,000 per 40 kg.
Over protests from farmers, district administrations in most districts of Sindh and Vihari district of Punjab urged cotton growers to buy cotton at the government-fixed intervention price of Rs 8,500 per 40 kg; Otherwise strict action will be taken against them.
Another important issue is the 18% sales tax on seed cotton (banola), which was earlier announced to be abolished by the federal government in the federal budget 2022-23, but was later levied only on cotton used for seed purposes. was confined to the seeds of Now cotton ginners have to pay sales tax of lakhs of rupees from FBR.
They are getting notices which are not acceptable to them.
In this situation, cotton growers have appealed to the federal government to immediately withdraw the 18% sales tax imposed on cotton seed, and to bring back cotton prices to TCP farmers at an intervention price of Rs 8,500 per 40 kg. Should buy footy from. intervention price level.
He demanded that the federal government should also restore the subsidy withdrawn from the textile mills and also reduce the mark-up rate for the textile mills so that the textile mills resume cotton procurement to stabilize cotton prices. Can do
As per the instructions of Asif Zardari, the Agriculture Department has fixed the price of footi in Sindh at Rs 8500 per 40 kg. Agriculture Department Sindh has already issued a notification in this regard. On behalf of the government, instructions have been given to the agricultural officers that the farmers should get the fixed price. Asif Zardari protested before the Federation regarding the prices of cotton. Farmers complain that they are not getting the prices announced by the government
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