ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday allowed cotton imports from Afghanistan and Central Asian States (CAS) via Torkham border provided that all sanitary and phytosanitary (SPS) measures were fulfilled.

The ECC meeting, presided over by Minister for Finance Asad Umar, also approved sale of 200,000 tonnes of wheat to the poultry industry as well as payment of Rs1.066 billion dues to the families of deceased employees of Pakistan Steel Mills (PSM). The meeting deferred gas load management for winter months until the next meeting.

The import of cotton via Torkham — a major border crossing between Pakistan and Afghanistan — was allowed on the request of All Pakistan Textile Mills Association (Aptma). The committee directed that all SPS regulations shall be abided during the import process. The textile importers would also have to produce a certificate from the National Plant Protection Organisation (NPPO) for the commodity’s origin.

SPS measures — also know as quarantine measures — are border control regulations necessary to protect human, animal, and plant life or health.

ECC approves Rs1.06bn grant for PSM workers

For the long run, the ECC directed all relevant ministries to engage with the textile industry for establishment of a permanent quarantine facility for cotton imported via land route for which the Federal Board of Revenue’s (FBR) Customs Department had proposed a site as an alternate dry port.

The meeting was informed that the textile industry consumed up to 15 million bales per annum. However, local production has be declining over the years and stood no more than 11-12m bales. This shortage has resulted in the country becoming a net cotton importer of the commodity.

Another issue faced by the textile industry was the short- to medium-staple length of domestic cotton. This led to the import of long- and extra-long staple cotton for production of finer yarn counts for subsequent transformation into high value-added finished products. Import sources for Pakistani industry include Afghanistan and CAS since procuring the commodity from these countries was cheaper (due to land route) as compared to the United States and other countries.

Given the sensitivity of the issue, Prime Minister’s Adviser on Commerce, Textile and Industries Abdul Razak Dawood held an inter-ministerial meeting including all the stakeholders.

The Ministry of National Food Security and Research (MNFSR) was of the view that cotton was a sensitive crop and attracted a variety of pests, thus required pest scouting from importing country. In this regard, fumigation was a must to counter such threats, the ministry stressed.

The Plant Quarantine Act allows cotton to be imported via sea route only since quarantine facilities are available at Karachi at present. However, for majority of cotton imports, Afghanistan was only a transit route for which pest scouting from CAS was also required to avoid major threat of new pests harming domestic cotton.

Last year, the Plant Protection Department (PPD) undertook many SPS measures. However, the said facility was not available at the Torkham border. Meanwhile, Afghanistan did not arrange the pest scouting visit of PPD to its cotton growing areas and could not develop an English-based template.

Aptma was of the view that quarantine rules were applicable to American Cotton only and were not required for Afghanistan or CAS cotton.

The MNFSR disagreed saying the origin of such cotton was also American.

Aptma believed the term American Cotton was defined on area basis and not on genetics basis. The textile body offered to undertake fumigation process at Torkham border. It further agreed to build such facilities at Torkham border either by its own resources or through the Export Development Fund (EDF).

The ECC, after discussions, concluded that cotton has to be imported from Afghanistan and CAS for being economical and alternate choice to meet the shortage but this should be subject to fumigation at Torkham to abide by all protections required under the law and rules.

Grant for PSM

The ECC — in consideration of a proposal from the Ministry of Industries and Production — approved a grant of Rs1.066bn for payment of outstanding dues (provident fund, gratuity, and payroll dues) to the families of deceased PSM employees.

The meeting did not take up the issue of similar other PSM liabilities of Rs67bn, including Rs52bn provident fund and Rs15bn gratuity. The government has not been able to consider a plan for revival of the PSM in three months in office even though it has decided not to privatise it.

The ECC also considered a report on value chain of sugar prepared by the Secretary MNFSR. It did not agree to a proposal from some participants for allowing maximum sugar exports even if it required some financial support. Minister for Railways Shaikh Rasheed Ahmed opined this would create a scam when resultantly domestic prices go up. He said the product was available at below Rs60per kg in the market and a price increase due to export amid rising inflation caused by gas and power rates would be difficult to digest.

The ECC took note of the issue of pending payments to sugarcane growers as well as difficulties faced by the millers in view of surplus stocks, possibility of their export and redressal of liquidity issues and directed Minister for National Food Security Sahibzada Muhammad Mehboob Sultan and Mr Dawood to hold meetings with the Pakistan Sugar Mills Association and resolve these issues.

The ECC also approved sale of 200,000 tonnes of wheat from the surplus stocks available with Passco to Poultry Association of Pakistan (PPA) at the rate of Rs1,300 per tonne — the official procurement rate for last year crop. The government has already allowed 0.5m tonnes of wheat export with $115 per tonnes freight subsidy and set Rs1,350 per tonne procurement price for next year crop.

Published in Dawn, November 23rd, 2018