Traders in the cotton market are hopeful that situation in the cotton market will start improving very soon as the Punjab and Sindh governments have allowed the whole textile supply chain to start their operations.
However, market sources said that ginners were under pressure because they were unable to sell 5 lac bales of cotton of worth Rs 20 billion which was lying under open sky and there was no buyer because of the lockdown due to the coronavirus.
Pakistan Cotton Ginners Association has appealed to the Imran Khan, Prime Minister, Abdul Hafeez Sheikh, PM Advisor on Finance, Syed Fakhar Imam, Federal Minister for National Food Security and Research, Razak Dawood, PM Advisor on Commerce and Textile Razak, Reza Baqir, Governor State Bank of Pakistan that ginners are unable to repay bank loans plus mark-up thus government should waive the mark-up of January to June 2020. They also appealed that bank guarantees cannot be adjusted under prevailing situation it should be deferred for the period of one year.
They also demanded that exemption of oil-cake (Khal) from sales tax be granted through a Presidential Ordinance. Naseem Usman , Cotton Analyst told that cotton sowing would be badly hit if arrears of growers were not cleared immediately and dream of self sufficiency in cotton could not come true.
He said that government should announce a bailout package for the ginners so that payments to growers could be possible. Cotton stock must be exempted of sales tax, income tax and other taxes. He stressed on the need of the revival of ginning industry which is facing severe liquidity crunch. He said that government should fix the electricity tariff at Rs10/unit like other exportable industries.
