PCGA general body meeting: 1,100 ginning factories to shut down from Aug 1

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PCGA general body meeting: 1,100 ginning factories to shut down from Aug 1

* PCGA has 881 members in Punjab and 205 in Sindh

By Razi Syed

KARACHI: Around 1,100 member ginning factories of Pakistan Cotton Ginners Association (PCGA) will shut down ginning activities from August 1, 2008, it was decided at the general body meeting Monday.

President PCGA, Chaudhry Muhammad Akram Jutt, said due to increase in cost of ginning, price of phutti (raw material), utilities price besides low production due to load shedding, excise duty on bales and imposition of licence fee has forced the PCGA to stop their ginning activities in the country.

He said imposition of newly announced tax of Rs 5 per bale by the government has crippled the production, which is already bearing the brunt of liquidity crunch and higher bank rates.

“The ginners will bear another financial burden of around Rs 52 million per quarter due to this tax”, he added.

He said around 881 ginning units were functioning in Punjab while 205 were operating in in Sindh under the umbrella of PCGA. They have decided to close down their business activities in order to pressurise the government to redress their grievances.

“The Ministry of Textile and Federal Board of Revenue did not pay heed to the PCGA’s grievances and the Ministry also cancelled a scheduled meeting on July 26,” Mr Jutt said.

Director on Board of Karachi Cotton Association (KCA), exporter, importer and a ginner, Ghulam Rabbani, said that closing down of ginning units in the country would push the cotton price to a level of around Rs 4,500 per maund.

“The textile and spinning sectors would suffer a heavy setback of supply and as a result production of yarn and cloth would suffer,” he said. Rabbani said around 500,000 bales were in the backlog and the current demand of textile sector stood around 15.5 million bales this year of which mills had only purchased around 6.8 million bales.

He informed the shortfall stood around 4.4 million bales and mills would bear an additional burden of around Rs 50 billion on the imports.

Shortfall will be met by imports from US, India and Brazil etc but it will take another three to four months to mature till the new spinning activities will start.

He said cotton prices in Pakistan were the lowest in the world and the produce was available at 68 to 69 cents per pound while in the international market, its price was around 81 cents per pound.

“How can a miller or spinner get the stuff on lower rate while there are plenty of export orders in the pipeline,” he questioned.

He said the international lint buyers consider Pakistani cotton as the best in quality in the international market.

President PCGA, Sanghar cotton belt region, Rana Abdul Sattar, said that non-availability of water supply, poor pest control, inadequate provision of inputs including pesticides to tackle mealy bug, Cotton Leaf Curl Virus (CLCV) and sowing of BT cotton without certification has already pushed the ginners against the wall.

He said the country would not achieve the government’s revised figure of 12.8 million bales for the season 2008-09.

http://www.dailytimes.com.pk/default.asp...008_pg5_11