Pakistan apparel industry has been facing severe shortage of cotton yarn at a time when international buyers are planning to place orders for Christmas. The local garment industry due to price factor and especially owing to artificial shortage of cotton yarn created by the spinning as well as ginning industry, which are holding stock in the hope of further price hike, are not able to entertain the international buyers, said Pakistan Readymade Garments Manufacturers & Exporters Association (Prgmea) chief coordinator Ijaz Khokhar.
Prgmea chief coordinator stated that apparel export sector is also under severe pressure due to hard competition in the international market from the countries like Bangladesh, Vietnam and Cambodia. He said that squeezing the apparel export sector will lead to decline in export earnings coupled with unemployment in the country.
The apparel industry, over burdened by more than 11% multiple taxes and utility cost, demands at least 15% special support to stay in international export market otherwise all current business will be shifted to other countries, he cautioned. They request Prime Ministerâ€™s directive to concerned Ministries to focus especially highly value-added sector and prepare a solid strategy to get the industry sustained.
The current cotton scenario is pushing garment manufactures to downward because of non-availability of cotton yarn in domestic market, as mills are reluctant to quote despite the fact that manufacturers are ready to purchase yarn at prevailing high market prices. Spinning mills have been holding stocks on the prediction that prices will go further up amidst high additional regulatory duty on import of cotton yarn.
Ijaz Khokhar said that garment exporters are getting nervous to make the shipment well in time due to artificial scarcity of raw material, forcing their buyers to go to their competitor countries, offering lower rates, leading to the collapse of their industry.
The value-added textile exporters, who had constantly been participating in world fairs like in Germany and Turkey, and bagging a considerable amount of orders but their exports can take a hit if local yarn prices remain high.
The spinning sector has always advocated for a free market mechanism, but the free market is not seen working now.
The apparel industry which is the producer of finished textile products needs protection, as it contributes more than 80% to the total textile exports and employs up to 38% of the total workforce of the country. On the other hand textile export of Bangladesh is touching $26 billion without growing a single cotton bale and completely depending on the imported yarn.
Industry demands immediate removal of regulatory duty, custom duty and other taxes on import of yarn from all countries. There is no harm to import raw material from anywhere as their cotton yield is also 30% less than the last year with lower prediction for current year. So, strong interaction is need to be developed between the government and stakeholders for rectifying the textile policy 2014-19
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