ISLAMABAD (Ahmed Mughal):- The Pakistan Govt has imposed 10 percent duty on import of cotton to curtail its imports.
The Economic Coordination Committee (ECC) of Cabinet met on Wednesday in Islamabad. Advisor to Prime Minister on Finance presided the meeting.
The ECC decided to impose 10 percent regulatory duty on the import of cotton. It has took the decision on the request of the Ministry of National Food Security and Research.
Pakistan produces around 13 million bales of cotton. It also imports about one million bales to meet the gap between consumption and production. Pakistan also imports around 1-1.5 million bales Extra Long Staple (ELS) cotton per anmum at any production level.
Areas under cotton cultivation in Pakistan have witnessed a persistent decline over the last few years. It is mainly because of turnover advantage and support price of other commodities.
The government withdrew custom duty, additional custom duty and sales tax on the import of cotton on January 31, 2019 which ended on June 30, 2019. Resultantly, 2,439,170 bales were imported during July 2018 to June 2019 and the local cotton prices went down from Rs 9410 per maund in November 2018 to Rs 9241 per maund in March 2019.
Cotton production in 2018-19 (9.98 million bales) has witnessed 16 percent decrease against last year. However, for the year 2019-20, the government has fixed an ambitious target.
The govt fears it may create an imbalance in cotton stocks if it continues facilitate imports of cotton. accelerated imports has affected the sowing of new crop.