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Contradictions in cap on yarn export policy - APTMA
20
Mar '10
Many contradictions have been observed by the All Pakistan Textile Mills Association (APTMA) in the governments' decision to impose a ban on export of yarn and capping export price for several categories of yarn below $3.5 per kg.

The cap was imposed on exporting yarn products for a price beyond $3.5 per kg, while even small value-added textile products like towel have been exported at a price of $2.73 per kg unit during January while, cotton yarn fetched $2.31 per kg for the corresponding period.

Yasin Siddik, APTMA Vice-Chairman, stated that, there has been a constant decline in the price of towels since the very beginning of current financial year and owing to the same it now almost matches the unit price of cotton yarn.

During July 2009, towel was priced to be sold at $3.87 per kg, but thereafter it started declining and touched $2.73 per kg in January this year. APTMA's representative articulated that even though figures for February are not out, but considering the ongoing trend, it appears that there would have been a further decline in the per unit price of towel.

Yasin, noted that both cotton yarn and towel are being traded at almost similar prices and questioned the very basis of the argument put forth by the value-added sector, who endeavoured to put a ceiling on exports of cotton yarn, purportedly to ensure proper supply of yarn for downstream industries.

He stated that with the intention to enhance exports of downstream industries, for long, they have been bestowed with subsidies and cash incentives. As compared to the raw or textile products with lesser value addition, the high value-added textile products are expected to earn higher per unit price, he believed.

According to him, government should give way to free trade mechanism rather than favouring the downstream textile industry to the detriment of spinners. He remarked that they are going to put up a demand of the government, to refrain from restricting yarn export, as he cautioned that else it may badly impair the spinning industry and resultantly lead to closure of the units.

Fibre2fashion News Desk - India

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