More than 15 percent of Pakistan’s current cotton crop has been destroyed by severe rains and flooding, introducing a high level of uncertainty about the nation’s plans for export shipments. The All-Pakistan Textile Mills Association (APTMA) and the International Cotton Association (ICA) have agreed to strengthen their collaboration on the cotton needs of Pakistan’s textile industry.
Floods perished 2.65 million livestock, 334 poultry and 156 fish farms putting farmers on their knees when it comes to meet food demands of 100 million people in these areas this year. Loss of cotton & rice crops based in the Indus River basin are estimated to be over US$2bn.6/20
— Zahid Gishkori (@ZahidGishkori) September 3, 2022
According to ICA president Alex Hsu, the delegation’s visit is part of the organization’s outreach to Pakistan initiative. Bill Kingdon, managing director, and Carl Peltzer, director, ICA, accompanied him.
Read more: Pakistan to see over 20% growth in exports: APTMA
Alex Hsu has stated that a training seminar on the ICA guidelines will be held in Pakistan in October. He stated that the seminar’s purpose would be to inform APTMA members about the cotton trade, obstacles, and potential solutions to problems experienced by Pakistani cotton purchasers in the hands of suppliers.
The ICA delegation addressed the APTMA members’ concerns about membership, dispute resolution, and delayed shipments, among other things. Foreign delegates informed APTMA members about the leading global practices in the cotton and textile trade being implemented by various nations in response to the new challenges.
“We are looking forward to deepening our regional linkages and developing contacts with an important textile country in South Asia, with large ICA membership and a significant international position in yarn and textile manufacturing,” he said.
Speaking at the event, APTMA chairman Rahim Nasir offered the APTMA facilities for the ICA training session. He also requested the ICA to establish an office on the APTMA grounds for better coordination, with the soaring need for cotton in the coming years.
Cotton, he added, is an important cash crop for Pakistan and a major raw material for its textile sector, accounting for 75 percent of the fiber mix in textile industry products, which provide a living for 25 million Pakistanis.
Chairman APTMA stated that cotton production in Pakistan has plummeted to less than 8 million bales this year, compared to a projected consumption of 13 million bales, due to water shortages, fake pesticides, and poor insect management. He noted that, when combined with other fundamental issues, the cotton import bill in FY022 has risen to roughly $1.8 billion.
He stated that Pakistan is becoming a cotton importing country, but importers are unaware of the ICA rules and their rights as buyers.
According to him, the prevalent perception is that the arbitration hearings favor the suppliers. Similarly, he continued, there have been complaints about exorbitant arbitration fees for non-ICC members.
Hamid Zaman, Chairman Northern Zone, stated that issues such as slow settlement, short weighing, and an unviable solution of invoicing back where the seller is defaulter, deterrent penalty for willful default, non-coverage of short weight under the compensation clause, and costlier charges discourage APTMA members from applying for ICA membership.
He recommended to the ICA delegation that ICA registered testing labs be established in Pakistan. He also suggested that the ICA form a joint venture with APTMA to help its member mills boost capacity.
Growers and government officials are doing what they can to minimize the crop damage, such as spraying pesticides in fields as soon as the waters recede to protect against insects and viruses. Nonetheless, it’s estimated that the local textile industry will need to import cotton from the United States, India and Brazil to meet its needs, at a cost of more than US$900 million.