Textile mill owners seek Rs26bn subsidy, Import of cotton

The initial reports of pest attack on cotton crop and a bumper sugarcane crop have turned off Pakistan''s fabulously rich textile tycoons and sugar barons.

Owners of textile and sugar mills want the government to provide them financial help from taxpayers'' money. There is total panic in the textile sector as spot prices of cotton jumped to Rs 3,200 a maund on Tuesday.

Textile mill owners used to demand duty free import and export of cotton. But as prices of cotton touched Rs 3,100 and Rs 3,200 a maund this week after reports of pest attack on the crop, Federation of Pakistan Chambers of Commerce and Industries president Riaz Tata has demanded of government to "immediately import 1.5 million bales of cotton from Central Asian republics and make it available to the local textile industry at international competitive prices." The FPCCI chief issued a statement on Tuesday and blamed ''a few middlemen'' for "speculation and hoarding".

A very conservative estimate put import cost of 1.5 million cotton bales anywhere near Rs 25-26 billion. Reports suggest that cotton prices in Uzbekistan are over Rs 4,500 a bale and actual import cost may be even much higher. Mr Tata represents rich textile community who in the last three years earned more than $16 billion through textile exports only.

It means that textile exporters earned more than Rs 960 billion from exports in the last three years. They want the government to provide Rs 25-26 billion from public money for cotton import.

A demand to provide this imported cotton at "competitive prices" means involvement of subsidy. Textile dealers also want a ban on cotton export. The textile mill owners reap rich profit from domestic market also all these years. But the entire textile sector pays hardly Rs 300 million tax every year on their personal and corporate incomes.