Sharp increase in cotton yarn prices in Pakistan by almost 20% has hit hard the export-oriented value-added textile sector. Newly-elected senior vice chairman of The Pakistan Readymade Garment Manufacturers and Exporters Association( PRGMEA,North Zone), Sheikh Luqman Amin said that the unprecedented surge in cotton yarn rates during the cotton crop season is not understandable, as the prices are usually at the lowest ambit these days.
He added that the cotton yarn prices have increased by around 20% to Rs.12,000 per bag of 100 pounds from Rs.8,000 due to cartelization of local manufacturers who are holding the stock to create artificial shortage.
The PRGMEA senior vice chairman asked the government to take preventive measures, as the export target would not be achieved due to high energy cost and discriminating import duties on industry raw material.He appealed the government to abolish additional regulatory duty on cotton yarn that should be imported freely from anywhere.
Sheikh Luqman Amin said that value-added textile sector appreciates the government for accepting its genuine demand to provide 50 percent of the export package incentive on the same terms as for the period from Jan to June, 2017 without condition of increment but this should be implemented without any further delay.
He said that exporters were battling hard for their survival in the global market in the face of severe competition with the regional countries, terming funds blockage as main cause of continuous drop in exports.
Sheikh Luqman Amin said the government should take drastic steps for enhancing exports and addressing the problems of the industrial sector as the top priority, because uncertainty is negatively affecting the whole textile sector which contributes more than 54% share in total exports of the country.
He said that textile has become the most important sector especially after grant of the GSP Plus status by the EU countries but the artificial shortage of cotton yarn has put the â€˜free market accessâ€™ status at risk.
Sheikh Luqman said since the apparel sector already has a very limited production line owing to lack of latest fabric varieties at local level the harsh duties are resulting into significant decline in apparel export. He said that apparel industry is already suffering with the low productivity due to shortage of cotton, high energy cost, and discriminating import duties on the industryâ€™s raw material.
He asked PM Khaqan Abbasi to direct policy makers to work for reduction in all input costs, otherwise the export-oriented industries would not only shut down their operations, but millions of workers would also lose their jobs.
The newly-elected SVC also proposed the government to release funds to the central bank for immediate payment of duty drawback of taxes to the exporters under PM Package as the immediate payment of all outstanding refunds of sales tax could save the industry.
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