Daily Times

KARACHI: As the United States (US) has allocated more than $600 billion for subsidies on agriculture commodities – mostly for cotton growers – developing countries’ lint producers are finding it difficult to capitalize on cost and international price competition.

Ghulam Rabbani, a senior member the Pakistan Yarn Merchant Association, said that this was unfair international trade practice and major cotton producers in the developing countries, especially in Pakistan, were facing hardships due to high input cost and higher bank rates. “Instead the US is demanding tint other countries to end subsidies on agriculture.”

He said that the domestic textile and spinning sector had to import around 3 million bales in 2016-17 to meet the shortfall and keep the wheel of the industry moving. He said the drop was mainly related to higher production costs and an uncertain economic environment.

Rana Abdul Sattar, a ginner and former Sindh Assembly member said, “Input cost, uncertified supply of cottonseed and long-awaited demand for futures trading at Karachi Cotton Association are added bottlenecks to growers for acquiring better yield.”

There are not any major increases in acreage, but extreme weather conditions and pest attack negatively impacted crop yields in 2016-17, he said.

Pakistan is the fourth largest producer of lint in the world, behind China, Indian and US and has the 3rd largest spinning capacity in Asia after China and India.

In 2016-17, the USDA expected US cotton production at 14.9 million bales, India at 28 million bales and Pakistan at 10-plus million bales.

Currently, internationally cotton is being traded at $76-$78 cents per pound and on domestic front, lint prices remained on firm as during 2016-17, cotton was traded at Rs 6,000 per maund to Rs 6,550 per maund depending on quality and trash level.

Rabbani said that the World Trade Organisation had once agreed that export subsidies for agriculture would be abolished. “Developed country members should eliminate their scheduled export subsidy entitlements as of the date of adoption of this decision and developing country members should eliminate their export subsidy entitlements by the end of 2018.

But silver fibre-related people have questioned that whether the decision has been implemented in full and fair manner or political economy of big ones is standing in way of fair play.