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Garment producers seek 5% duty on yarn exports
May '10
The textile industry is on the verge of collapsing as yarn dearth has pushed a number of value-added textile producers to shut their businesses. For saving the industry from extinction, the industry stakeholders have realized the need to develop a joint strategy.

During a meeting with the spinning sector representatives, held last week, the garment producers pulled back their earlier demand on higher regulatory duty imposed on yarn exports and now want only five percent duty on these exports. However, the representatives of spinning sector strongly opposed the regulatory duty on yarn exports, mentioning it as an impractical move.

The regulatory duty cannot be imposed on yarn exported to China as it is forbidden under the free trade agreement, signed between the two countries, said Akber Sheikh, former Chairman, All Pakistan Textile Mills Association (APTMA), Punjab Zone. The country exports around 60 to 70 percent yarn to China.

As the rates of yarn are linked with that of cotton, it has become difficult to control yarn rates, said Ejaz Gohar, Chairman APTMA, Punjab. For instance, prices of yarn increased from Rs 760 per 10 pounds in June 2009 to Rs 1,260 per 10 pounds in April 2010 due to the increase in rates of cotton from Rs 3,350 per maund to over Rs 6,700 per maund, he added.

However, the rise in yarn prices is far less when compared to the hike in the rates of cotton. The spinners have stopped importing cotton from international markets following the quota imposition on yarn, informed Gohar. Moreover, the farmers are also against the imposition of yarn quota due to fear of lower consumption of cotton by local spinners.

Also, the farmers support free market economy as it has helped them in the past to receive global rates on their yield. They also support free export and import of yarn and seek free export and import of cotton.

Fibre2Fashion News Desk - India

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