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Apparel sector derides unrestricted export of cotton and yarn
Oct '09
The apparel industry is deriding the unrestricted shipments of raw cotton and cotton yarn from the country, which is pushing the prices of these products higher, ultimately leading to an increase in costs for the apparel manufacturers.

Experts from the industry are of the opinion that unrestricted export of cotton yarn would have a serious effect on the exports of the value added apparels making it difficult to achieve the ambitious export target.

They add by saying that, the irony is that the cotton yarn is being exported to competing countries, which is tantamount to subsidizing them and who will also compete in the finished products overseas market, with Pakistan.

They say that, the value added apparel sector is converting raw cotton available at 67 cents per pound into value added finished goods worth US $5-6 per unit; thereby, earning additional valuable foreign exchange for the country.

According to statistical data, exports of raw cotton, cotton yarn and fabrics have increased considerably in recent times. In fiscal 2007-08, raw cotton exports were up 40 percent, up 25 percent in fiscal 2008-09 and overall grew by 20 percent from 2006 to 2009.

In May 2009, exports of raw cotton recorded a growth of 31 percent over the previous month, while in June; it registered an increase of 117 percent over May. In the case of cotton yarn, exports rose by 4 percent in May over April and by 14 percent in June over May 2009.

Exports from value added sectors, on the other hand have witnessed a declining trend in the last fiscal year 2008-09. Knitwear fell by 8 percent, bedwear 10 percent and clothing declined by 4 percent, while exports of cotton and yarn increased by 25 and 15 percent, respectively.

The main impact of export of raw cotton and yarn has been on the prices. Prices of different qualities of combed and carded cotton yarn have increased tremendously in the last few months and have risen between 24 to 33 percent in the last three months.

Due to the rise in prices of raw materials, production cost garments has surged by 10 percent, which has reduced the competitiveness of the Pakistani apparel exporters. Experts say that it has become a matter of survival since, as it is they work on 5-6 percent margins.

Fibre2fashion News Desk - India

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