Latest news with #APTMA
Business Recorder
3 days ago
- Business
- Business Recorder
APTMA approaches Aurangzeb: Call to issue SRO issuance to impose 18pc sales tax on cotton fibre, yarn, & greige cloth imports
ISLAMABAD: All Pakistan Textile Mills Association (APTMA) has approached Finance Minister, Senator Muhammad Aurangzeb to issue an SRO (Statuary Regulatory Order) for the imposition of 18% sales tax on cotton fiber, yarn, and greige cloth imports without further delay. In a letter to Finance Minister, Chairman APTMA, Kamran Arshad has drawn his attention to the commitment made in the Federal Budget 2025–26 to impose 18% sales tax on all imports of cotton fiber, yarn of all kinds, and greige fabric, while retaining these items under the Export Facilitation Scheme (EFS). 'Our original request was for their complete exclusion from the EFS considering the damage caused by unnecessary imports to the domestic industry. Nevertheless, the important correction of equalizing the tax treatment of local and imported supplies for exports was pledged during announcement and presentation of the budget,' Chairman APTMA said adding that it has now been a month and a half since the Budget speech and almost three weeks since the Budget was passed; in accordance with the Deputy Prime Minister's Committee's decision, sales tax was to be imposed from July 15, onwards and this date has also passed. Yet the requisite SRO has not been issued. The Association further stated that delay coincides with the arrival of the new cotton crop, for which there are no buyers in the market. The tax disparity has eroded demand for locally grown cotton and domestically manufactured yarn and greige cloth. Given the continued uncertainty regarding the imposition of equivalent sales tax on imports, traders and mills are unwilling to off-take the new crop. Textiles account for over half of Pakistan's exports and represent one of the few sectors showing robust growth-exports increased by $1.5 billion in FY 2024–25. However, during the same period, textile sector imports rose by approximately US$1.5-2 billion, yielding a net loss for the balance of payments. The current account remains precariously balanced due to temporarily low international oil and gas prices. This situation cannot be sustained in the medium or long term. Pakistan must increase the share for domestic value addition in its exports, yet current policy incentives run counter to that objective. 'We submit that any further delay in issuing the promised SRO will exacerbate mill closures, businessmen migrating abroad, and the loss of hundreds of thousands of jobs. To safeguard the livelihood of our growers, spinners, and exporters-and to uphold the Federal Government's own fiscal and export targets we request that the SRO for imposition of 18% sales tax on cotton fibre, yarn, and greige cloth imports be issued without further delay,' he maintained. Copyright Business Recorder, 2025
Business Recorder
5 days ago
- Business
- Business Recorder
Power wheeling policy for export industry: MoC seeks update from PD ahead of NEDB meeting
ISLAMABAD: The Ministry of Commerce has sought an update from the Power Division on the long-awaited electricity wheeling policy for the export industry, ahead of the National Export Development Board (NEDB) meeting scheduled for Thursday (July 17), to be chaired by Prime Minister Shehbaz Sharif. On July 22, 2024, during a previous NEDB session, the Prime Minister had directed that the wheeling policy for the export sector be finalized without further delay. According to the Commerce Ministry, the upcoming 4th NEDB meeting on July 17, 2025, will include a review of the updated status of the wheeling policy, with a particular focus on recommendations from the technical committee headed by the Special Assistant to the Prime Minister. These include proposals for viable wheeling charges. Accelerating Pakistan's livestock exports in global halal markets Sources said the success of the Competitive Trading Bilateral Contracts Market (CTBCM) hinges on two critical factors: the volume of available capacity and the level of wheeling charges. Wheeling charges are now expected to be reduced to Rs12/kWh, down from the earlier proposed Rs26/kWh. The All Pakistan Textile Mills Association (APTMA) has strongly advocated for electricity availability through business-to-business (B2B) contracts at wheeling charges between 1 to 1.4 cents/kWh, excluding cross-subsidies and stranded costs. APTMA argues that in the current economic climate, boosting exports must be a top national priority. The industry warns that uncompetitive power tariffs and emerging green energy regulations in export markets are serious threats to Pakistan's textile and apparel exports. A competitive wheeling mechanism under CTBCM is considered essential for the industry's recovery and long-term sustainability. The association has criticized the Central Power Purchasing Agency-Guarantee (CPPA-G) and distribution companies (Discos) for proposing an 'absurd' wheeling charge of 9.6 cents/kWh, saying it defeats the purpose of CTBCM and market liberalization. APTMA notes this rate is even higher than the full electricity tariffs for export sectors in competing countries such as: (i) Bangladesh: 8.6 cents/kWh; (ii) India: 6 cents/kWh; and (iii) Vietnam: 7.2 cents/kWh APTMA has also raised concerns about Rule 5 of the Eligibility Criteria (Electric Power Supplier Licence) Rules, 2023, which it claims undermines NEPRA's authority to independently determine fair wheeling charges. The rule reportedly allows the Power Division to dictate both the structure and amount of wheeling charges. Reiterating its long-standing demand, APTMA has called for a regionally competitive power tariff of 9 cents/kWh, citing both regional benchmarks (5–9 cents/kWh) and domestic cost-of-service studies, which show that tariffs for 83–84% of Pakistani consumers are already around that level. NEPRA's recent determination supports this demand, with industrial base rates for July 2025 set at: (i) Rs21.65/kWh (off-peak); and (ii) Rs30.76/kWh (peak). These rates roughly translate to 9.5 cents/kWh before the application of cross-subsidies. On renewable energy wheeling, APTMA claims that the current wheeling rate of 4.5 cents/kWh makes CTBCM implementation economically unviable. It notes that even for a textile unit operating three shifts a day, only about 20% of energy needs can be met through wheeling at a viable cost (~8 cents/kWh). Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
Industrial power tariff: Power Div, APTMA at odds over cross-subsidy calculation
ISLAMABAD: The Power Division and the All Pakistan Textile Mills Association (APTMA) appear to be at odds over the actual volume of cross subsidy embedded in industrial power tariffs, with APTMA claiming that the burden is nearly twice what the Power Division reports. The dispute emerged at a time when the Power Division claims it is engaging with the industry to further reduce cross subsidies to ease the financial strain on industrial consumers. The Division had earlier announced a reduction of Rs 174 billion in cross subsidies. 'We do not agree with the Power Division's calculation of Rs 74 billion in cross subsidies in industrial power tariffs,' stated Shahid Sattar, Secretary General of APTMA, in a letter addressed to Power Minister Sardar Awais Khan Leghari. 'According to our analysis based on Nepra's determination of consumer-end tariffs for FY26, the actual cross subsidy amounts to at least Rs 137 billion.' PD uncertain on power tariff changes from July 1 APTMA defines cross subsidy as the difference between a consumer's cost of service, which includes generation, transmission, distribution, and associated margins, and the effective price charged by the government of Pakistan. Under Section 31(4) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, Nepra is mandated to determine a uniform tariff for public sector licensees in the interest of consumers. The National Electricity Policy 2021 also allows the government to propose uniform tariffs across consumer categories based on socioeconomic objectives, budgetary targets, and regulator recommendations. According to APTMA, power tariff determination results in two sets of tariffs: one determined by Nepra, which reflects the true cost of service across consumer categories, and another proposed by the government, which applies cross subsidies. Nepra's tables show that residential users consuming up to 300 units and non-ToU agricultural consumers are charged below-cost tariffs. In contrast, other consumer categories, including industry, pay higher-than-cost tariffs to cover the resulting revenue gap—effectively bearing the cross subsidy burden. 'Our calculations, using category-wise consumption data from the FY25 determination (due to lack of FY26 data), indicate a cross subsidy of nearly Rs 140 billion in industrial power tariffs. This figure may rise by 2–3% based on CPPA-G's projected demand growth for FY26,' APTMA noted. APTMA suggests that the Power Division's Rs 74 billion figure likely uses an average system-wide benchmark—such as the FY26 Power Purchase Price (PPP) of Rs 25.98/kWh—instead of Nepra's cost-reflective tariffs by category. Based on this method, APTMA acknowledges the cross subsidy may drop to around Rs 85 billion, closer to the government's estimate. However, APTMA insists the cross subsidy should be calculated against actual cost of service per consumer category, not a generalised average. 'If the goal is to deliver cost-reflective and competitive power tariffs, it's critical that government and stakeholders align on definitions and calculation methodologies.' APTMA reiterated its long-standing demand for a regionally competitive power tariff of 9 cents/kWh. This demand, it says, is supported not only by regional benchmarks (5–9 cents/kWh) but also by domestic cost-of-service studies that show tariffs for 83–84% of Pakistani consumers' hover around 9 cents/kWh. Nepra's own determination supports this, with industrial base rates set at Rs 21.65/kWh (off-peak) and Rs 30.76/kWh (peak) for July 2025, equating to roughly 9.5 cents/kWh before applying cross subsidies. On the issue of wheeling charges, APTMA argues that the current rate of about 4.5 cents/kWh undermines the viability of the Competitive Trading Bilateral Contract Market (CTBCM) for renewable energy. For a textile unit operating three shifts, only 20% of its energy demand can be met at a viable rate (~8 cents/kWh) through wheeling. The remainder must be sourced from the grid, where marginal costs—particularly from RLNG plants—total around Rs 37.79/kWh (or 13.4 cents/kWh), resulting in an average energy cost of 12.32 cents/kWh, significantly above the industry's target. APTMA emphasised the need for tariff predictability, which is crucial for long-term business planning. Volatile rates pose major challenges, particularly for exporters. The Association urged the Power Minister to reconsider wheeling charges and allow hybrid consumers (those using both CTBCM and grid power) to retain access to the industrial tariff, enhancing predictability and competitiveness. APTMA also acknowledged the government's new incremental consumption package, calling it a 'substantial improvement' over previous schemes, which were complex and impractical for industry adoption. 'We appreciate that industry feedback is now being actively considered in policy design,' the Association added. On the topic of industrial Time of Use (ToU) tariff reform, APTMA said it has recently engaged with Abid Lodhi and Naveed Qaiser at PPMC. 'They outlined several system constraints, and we are now developing a proposal for a more flexible ToU tariff structure, which we plan to submit in the coming weeks,' said Sattar. Copyright Business Recorder, 2025
Business Recorder
14-07-2025
- Business
- Business Recorder
Weekly Cotton Review: Trade volumes improve in largely stable market
KARACHI: The cotton market has shown overall stability in prices, with an improvement in trade volume recorded. However, recent rains in Punjab have disrupted cotton trade. Meanwhile, the market awaits the government's notification regarding the Export Facilitation Scheme (EFS). Experts report that Pakistan's cotton production has sharply declined due to unfavorable weather conditions and government policies, dropping from a record 15 million bales to just 5.5 million bales. Chairman Pakistan Cotton Ginners Forum Forum Ahsan ul Haq expressed concern over the situation, stating that this decline is severely impacting the country's foreign exchange reserves. Amid these developments, the Pakistan Central Cotton Committee Cotton Committee (PCCC) and the All Pakistan Textile Mills Association (APTMA) have reached an agreement on the issue of cotton crop residues. Additionally, the Punjab government has set an ambitious target for cotton production this season, aiming to produce 6 million bales. The local cotton market remained relatively stable over the past week, with prices showing slight variations across regions. In Sindh, cotton prices ranged between Rs. 16,000 to Rs. 16,400 per maund, while cottonseed (phutti) prices rose to Rs. 6,800–7,200 per 40 kg. In Punjab, cotton prices increased to Rs. 16,700–17,200 per maund, with phutti priced at Rs. 6,800–7,600 per 40 kg. Recent rainfall has provided some benefit to the crop, but further downpours could cause damage if water logging occurs. Currently, cotton trade in Punjab has been disrupted due to ongoing rains. Farmers are facing distress as declining phutti prices squeeze their margins, with many expressing concerns over high input costs and reduced profitability. Despite these challenges, trading volume improved during the week. The government has withdrawn the Export Facilitation Scheme (EFS) facility for cotton yarn and fabric imports while imposing a 10–18% sales tax on these items. This move aims to create a level playing field for local cotton producers. However, the official notification is still awaited. In a strongly worded statement, Muhammad Khalid Khokhar, Chairman Kissan Ittehad expressed grave concerns over the dire conditions faced by cotton and wheat growers. He warned, 'Wheat and cotton will no longer be cultivated in Pakistan,' highlighting the severe challenges plaguing the agricultural sector. Khokhar lamented that the new pricing policies have left farmers' households in mourning, with many struggling to survive. Meanwhile, an agreement has been signed between PCCC and APTMA regarding outstanding cotton payments. In a significant development, APTMA and PCCC have joined hands to revive the cotton industry, aiming to stabilize the sector and support distressed farmers. The collaboration seeks to address long-standing issues and ensure sustainable growth in cotton production. The rate of cotton in Sindh is in between Rs 16,000 to Rs 16,400 per maund, while phutti was traded at Rs 6,200 to Rs 7,200 per 40 kg. In Punjab, cotton prices stood at Rs 16,700 to Rs 17,200 per maund, with phutti priced between Rs 6,800 and Rs 7,600 per 40 kg. Meanwhile, rate of cotton in Balochistan is in between Rs 16,100 to Rs 16,300 per maund, while phutti was sold for Rs 7,000 to Rs 7,200 per 40 kg. The Spot Rate Committee of the Karachi Cotton Association maintained the spot rate at Rs 16,300 per maund. Karachi Cotton Brokers Forum Chairman Naseem Usman told that there is a decline in international cotton prices. In New York, the futures price of cotton is currently trading between 66 to 68 cents per pound. According to the USDA's weekly export and sales report, 75,100 bales were sold for the 2024-25 season. Vietnam led the purchases with 33,600 bales, followed by Pakistan with 13,000 bales, and India with 9,700 bales. For the 2025-26 season, 81,500 bales were sold. Bangladesh emerged as the top buyer with 23,100 bales, while Vietnam secured the second position with 19,900 bales. South Korea ranked third with purchases of 16,300 bales. The All Pakistan Textile Mills Association (APTMA), Ministry of National Food Security and Research (MNFSR), and Pakistan Central Cotton Committee (PCCC) have officially joined hands in a landmark agreement to resolve the long-standing cotton cess collection issue and lay the foundation for the revival of Pakistan's vital cotton sector. The signing ceremony was held at the MNFSR headquarters in Islamabad and witnessed by Federal Minister for National Food Security and Research Rana Tanveer Hussain, Secretary MNFSR Waseem Ajmal Chaudhary, Chairman APTMA Kamran Arshad, Chairman APTMA North Asad Shafi, Secretary General APTMA Shahid Sattar, APTMA Cotton Advisor Dr Javed Hassan, Cotton Commissioner & CEO PCCC Dr Khadim Hussain, and Secretary PCCC Dr Peer Adrees. Federal Minister Rana Tanveer Hussain lauded APTMA's constructive role in resolving this critical issue, emphasizing that cotton remains the lifeblood of Pakistan's textile industry and recognizing APTMA as its foremost stakeholder. The Minister expressed his full support for APTMA's vision, committing to place APTMA in the driving seat to lead the reform and revival of the Pakistan Central Cotton Committee. He also welcomed further engagement and collaboration, including a forthcoming visit to APTMA House Lahore. Chairman APTMA, Kamran Arshad, thanked the Minister for his proactive and collaborative approach, particularly in facilitating key policy measures such as easing cotton seed imports and addressing other issues in the cotton seed sector. Highlighting the severe cotton shortages in recent years that have adversely impacted the entire textile value chain, and the livelihoods of millions of cotton growers, he stressed that Pakistan has been compelled to import billions of dollars' worth of cotton from global suppliers including the US, Brazil, and Australia. Arshad reaffirmed APTMA's dedication to overcoming these challenges and hailed the agreement as a historic milestone that fulfills APTMA's promise to resolve the cess deadlock. Secretary PCCC Dr Peer Adrees noted the positive impact of APTMA's support, which has enabled PCCC to pay full salaries and pensions to its staff in recent months. Chairman APTMA North, Asad Shafi, echoed the critical importance of cotton to Pakistan's textile sector and emphasized APTMA's ongoing efforts to enhance value addition through promoting use of local cotton and inputs, development of domestic brands and internationally competitive products. Looking ahead, Kamran Arshad urged swift implementation of the PCCC restructuring to transform it into a modern, productive research institution that will spearhead innovation and productivity gains in cotton cultivation. He also called for an all-stakeholders conference, including farmers, ginners, and industry representatives, to collaboratively chart a sustainable path for Pakistan's cotton revival. APTMA remains steadfast in its commitment to support the resurgence of Pakistan's cotton crop, enabling the country to reclaim its position as a top global cotton producer. This revival is critical not only for safeguarding millions of jobs across the textile value chain but also for boosting textile exports and expanding domestic value addition— key drivers for Pakistan's economic growth and competitiveness in international markets. Despite a significant decline in Pakistan's cotton production, some stakeholders are once again recommending the cultivation of hybrid cotton, even though previous trials conducted twice ended in complete failure. Reports indicate that around 150 acres of hybrid cotton have already been planted in Punjab and Sindh shortly after the federal government allowed the import of cotton seeds. Surprisingly, the Pakistan Central Cotton Committee (PCCC), which must legally be consulted before any such cultivation, remains entirely unaware of these trials. Ehsan-ul-Haq, Chairman of the Cotton Ginners Forum, highlighted that Pakistan's cotton production has plummeted from a record 15 million bales to just 5.5 million bales due to extreme weather conditions, unfavorable government policies, and the unchecked expansion of sugarcane cultivation in cotton zones. He noted that instead of enforcing crop zoning laws, reducing agricultural input costs, and cutting the record 86% sales tax on the cotton ginning industry, authorities are focusing on importing hybrid cotton seeds under pressure from certain stakeholders. Haq recalled that in 2010, two global seed giants, Monsanto and Syngenta, conducted hybrid cotton trials in Pakistan in consultation with the PCCC, which failed completely, yielding 60% less per acre compared to traditional Pakistani varieties. Despite this, efforts are now being made to reintroduce hybrid cotton cultivation without proper evaluation or consultation with the PCCC, raising serious concerns about its potential impact on the already struggling cotton sector. The heads of Pakistan's two major agricultural institutions informed the Cotton Ginners Forum that despite multiple trials of hybrid cotton cultivation in various cities of Punjab and Sindh after 2010, all attempts failed completely. The primary reason was the incompatibility of these seeds with the local climatic conditions. They further revealed that over the past four to five years, experiments have been conducted in Pakistan with single-gene, double-gene, and triple-gene cotton seeds. Surprisingly, while double-gene varieties were expected to yield double the production of single-gene cotton and triple-gene varieties even more, the actual output of both remained lower than that of single-gene cotton. This has raised concerns that hybrid cotton cultivation in Pakistan does not appear to be succeeding, as most cotton-growing zones in the country are experiencing significantly higher temperatures compared to 2010. The officials added that they repeatedly contacted the company promoting hybrid cotton cultivation, asking them to share their trial data. However, they have yet to be granted access to this information. Copyright Business Recorder, 2025
Business Recorder
08-07-2025
- Business
- Business Recorder
Pakistan's textile exports rise 7.22% YoY
ISLAMABAD: The country's textile exports for fiscal year 2025 clocked in at $17.88 billion, up by 7.22 percent year-on-year (YoY) compared to $16.68 billion in fiscal year 2024. According to data from the All Pakistan Textile Mills Association (APTMA), textile exports were down by 7.36 percent compared to the peak of $19.3 billion in fiscal year 2022. Jul-Mar textile group exports up 9.38pc to $13.613bn YoY Textile exports stood at $1.53 billion in June 2025, showing an increase of 7.75 percent on a YoY basis compared to $1.42 billion in June 2024. Copyright Business Recorder, 2025
