LAHORE: In protest of increased levies and a “exorbitant” increase in the electricity cost for ginning units, cotton ginners nationwide have embarked on an indefinite strike.
In a show of protest, the Pakistan Cotton Ginners Association (PCGA) general body meeting in Sukkur on Sunday resolved to immediately halt the purchase of raw cotton and the distribution of ginned lint to spinning units around the nation.
PCGA chairman Chaudhry Waheed Arshad stated, “Cotton ginners are already paying 11 different types of taxes due to which they are suffering from severe financial hardship” and that it was no longer feasible “for us to continue the ginning business.”
Speaking to hundreds of ginners who had assembled from all over the nation, Mr. Arshad declared that there had been a “unanimous” resolution to immediately cease buying raw cotton.
In protest, the planting of new cotton crops and the provision of lint to companies will both be suspended.
He went on to say that until the PCGA’s demands are met, neither white lint nor any new contracts for the sale of cotton will be signed or provided to textile mills.
He declared that the government will bear the responsibility for the effects of the walkout on cotton exports, ginning and textile industry participants, and cotton growers.
Ihsanul Haq, the head of the Cotton Ginners Forum, asserted that the ginning industry is already subject to a general sales tax (GST) of 72%, and the PCGA has consistently asked the government to lower this rate.
He expressed sadness over the proposal in the finance minister’s earlier this month’s budget to impose an extra 10 percent GST on the sale of oil cake, which is the coarse waste left over after oil is extracted from different oilseeds.
According to him, authorities have been contacted time and time again to lessen the tax burden on the ginning industry because so many units have already closed as a result of high taxes.
According to Mr. Haq, this tariff is encouraging undocumented activity, reinforcing the ginners’ need for “a much-needed breather for the sector”.
Given that the cost of electricity for ginning plants is set at Rs2,000 per kilowatt hour, even in the event that a facility is closed, it would still need to pay at least Rs600,000 a month.
Growers of cotton, who are already moving to other crops because of increased production costs, low yields, and low prices for their produce, may suffer further damage from the strike.
In addition to having a negative impact on the market, the suspension of purchases of raw cotton will cause delays in farmer payments, which are necessary for debt repayment and the purchase of farm input for the following crop.
A 15-day strike, according to market watchers, would result in at least a Rs1,000 decrease in the price of raw cotton per 40kg. Right now, a 40kg bag costs about Rs 9,500.
The produce would suffer due to the delay as farmers are not skilled in proper storage methods. This will affect the quality of the lint, whether it is kept outside or indoors. The seeds will lose oil content in a store house because they are exposed to the elements—heat and rain—outdoors.
