All Pakistan Textile Mills Association (Aptma) has urged the government to allow quota-free export of cotton yarn, otherwise, the spinning sector will be compelled to launch countrywide protest.

Shahzad Ahmed, acting Chairman Aptma, along with S M Muneer, former President FPCCI and Nadeem Maqbool, former chairman Aptma, in a press conference here on Thursday also announced to call an emergency general body meeting of spinning sector to design future strategy.

He said the ministry of textile industry has unilaterally decided to reduce the quantitative restriction on the export of yarn from 50,000 tons per month to 35,000 tons per month from 1st March 2010. This step will badly damage the spinning industry in particular and the whole textile industry in general, he added.

Shahzad said for the past many years spinning industry has been badly hit by shortage of raw material, higher cost of production and international recession. These factors affected the viability and competitiveness of the industry. "Despite several appeals to the government to save this "Capital Intensive Sector," hardly any assistance was provided leading to closures of many mills. Although the downstream sector has been provided extensive relief in the form of duty drawback and reduction in mark-up on loans, nothing has been done to provide relief to spinners," he added.

Acting chairman Aptma said last over a decade the government has followed a free trade policy and the spinning industry is importing 3-4 million bales of cotton to meet its requirement which led to development of new products based on imported cotton, fetching higher value on export of yarn and providing excellent yarns for the local downstream sector.

Shahzad said the spinning sector has developed into a world class industry and a lot of investment has been made to ensure abundant supply of yarn for the domestic market.

He said despite ample quantity of yarn, we fail to understand this unilateral decision. He said this measure will badly hamper the trade and spinning mills will not be able to import cotton thus exacerbating the cotton shortage leading to closures, shortages and higher prices of yarn. "Aptma strongly protests the imposition of any kind of restriction on the export of yarn," he said.

Aptma members have made international commitments and failure to perform on account of government action will lead to disputes, loss of valued customers, loss of market share as well as damaging Pakistan's reputation as a reliable supplier, he added.

He urged the government that in view of the above facts, the government should lift quota on export of yarn immediately in the best interest of textile industry, which is the backbone of the economy. He also urged the government to provide duty-free import of man-made fibre and abolish all countervailing measures to reduce pressure on the consumption of cotton and encourage use of man-made fibre.

Acting chairman Aptma requested the government that the spinning sector should not be penalised in order to provide incentives just to cater for the vested interests of a few. He demanded of the government to provide incentives to the downstream industry from its own resources.

Local supply of yarn should be encouraged through economic solutions such as refinance and reduction of income tax from 35 percent to 5 percent. Aptma believes in free trade mechanism and the development of local industry through efficiency, productivity and competitiveness.

Source: Business Recorder