To meet the three-fourth requirements of the local weaving and knitting industry, Pakistani government being urged by traders to allow yarn imports from all markets across the world. This will also solve the conflict over the regulatory duty on polyester filament yarn.

Pakistan Yarn Merchants Association Central Chairman Muhammad Usman, advised the government that fabric imports from any part of the world should be allowed under legal channel of import, which includes letter of credit (LC) or documents against payments (DP) because the goods payments via banking channels can save the local downstream industry.

Usman also urged the government to put the fabric import from Dubai on the negative list as there is no weaving/knitting factories exist in Dubai while the Indian origin fabric was simply being routed through Dubai, resulting in causing severe losses to local industries.

PYMA chairman pointed out that the local manufacturers of polyester filament yarn can only meet 25 percent of the downstream industry’s demand, while remaining 75 percent requirement is met through imported yarn.

Currently, the National Tariff Commission is investigating into the losses caused by yarn dumping.

Usman said that local yarn manufacturers are persuading the government to impose regulatory duty on the import, which would result in bringing the weaving and knitting industry on the verge of complete collapse.

This will also increase the cost of yarn and fabric, thus making the entire downstream industry uncompetitive. The results would be disastrous for the exports, which are already suffering on account of high energy costs.

The yarn dealer alleged that local manufacturers are attempting to create monopoly to gain short-term benefits, at the expense of huge large downstream sector, which employs millions of people and is the back bone of the economy. He said that an anti-dumping duty of up to 18 percent was imposed on imported filament yarn from Thailand, Malaysia, Korea and Indonesia in 2005.

At that time, a total of 17 local yarn manufacturers were operating in the country. During the last more than eight years since the imposition of anti-dumping duty, the number of local manufacturers has come down to just four units.

According to Usman, the long-term solution for dealing with this serious issue is to modernize and upgrade plants of local manufacturers, besides enhancing their capacity to achieve economies of scale. The regulatory duty is not the right solution.