With the textile spinning sector at a standstill since 20 days, owing to the ongoing rift between them, value-added textile sector and the Ministry of Textile Industry, about $110 million worth of excess yarn is lying at the manufacturing units, and about $12-15 million worth of goods are blocked at the Karachi ports.
A Regulatory Duty of 15 percent on exports of yarn was imposed by the Ministry of Textile Industry on May 12, following various attempts of limiting yarn exports by also imposing quota of 50,000 and 35,000 tons, respectively.
Also, availability of excess yarn at the manufacturing units is because of absence of an outlet in a situation wherein everything is either blocked or limited with duty imposition.
With the Regulatory Duty of 15 percent on yarn exports, the consignment of the material got wedged at the Karachi ports, thereby, leading to a huge loss of precious foreign exchange. All this comes at a time, when the government is being suggested to ensure co-ordination within the private sector, to increase the country's economic growth.
Consignments cannot be exported due to a standoff coming out of the immovable approach of the textile ministry officials. As a result, excess yarn stocks are getting piled up at the manufacturing units.
The All Pakistan Textile Mills Association (APTMA) and the value-added textile sector had conducted successful discussions on the controversial 15 percent Regulatory Duty imposition on yarn exports, which was chaired by the Federal Minister for Textile Industry, Rana Farooq Saeed. Also, present for the discussions, were members of the Pakistan Textile Exporters Association.
It was for the first time, that all three parties agreed on the subject of yarn availability in the country, for the value-added textile sector. As per the agreement, made between the three parties, there would be no regulatory duty imposition on yarn exports earning $3.5 per kilogram or above.
Similarly, an all-party agreeable decision was also made, for the Letters of Credit (LCs) that were opened before May 12, when the Regulatory Duty on yarn exports was imposed. These LCs will be outside the range of the Regulatory Duty.
In addition, no quota too, will be imposed on yarn exports. But all other terms and conditions, with respect to yarn exports, will have the 15 percent Regulatory Duty imposition on them. This arrangement will come to an end on July 12, 2010.
Fibre2Fashion News Desk - India
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