Imposition of duties on yarn, force 25 mills to shut down

30 Jun '10

2 min read

Almost 25 spinning mills have shut down, within the last two weeks, due to duties imposed by the government on their superior-quality yarn exports, which is not utilised by the local industry.

As per Ejaz Gohar, Chairman, All Pakistan Textile Mill Association (APTMA-Punjab), the superior quality yarn producing mills, which have the capacity to grip their stocks, are currently functioning and have assured their buyers that, once the government fulfills its promise of lifting the ban by July 26, the export orders will be delivered.

Further more, APTMA members also said that, import and export of cotton is duty free, which is the basic raw material for cotton yarn. However, there is a 15 percent duty imposed on yarn exports, which has a much higher value.

Also, although there is a 4.5 percent duty and anti-dumping duty imposed on the imports of polyester fibre, no duty is levied on yarn imports made out of Polyester Staple Fibre (PSF), and this is according to SRO 15(I) 2010, January 6.

APTMA members opine that, by providing duty-free entry in to the Pakistani market, government is providing advantage to the foreign manufacturer of polyester yarn. Further more, government is also side-tracking the domestic polyester fibre producers by imposing duty on their raw material.

More so, due to these problems, Pakistani exporters; efforts to penetrate in to developed markets is getting hampered, informed Gohar.

In the meantime, APTMA PSF committee has made a demand that, government should lift all bans on imports of PSF and raw material imports of textile industry should be made duty-free, mainly because the duty drawback system is ineffective.

Spinners further mention that, the key possibility of surging the textile exports is in PSF related goods, as world-over use of PSF is about 65 percent as against cotton, which is 35 percent.

Due to discriminatory duties imposed on PSF goods, textile sector of Pakistan is unable to enter the PSF product based textile markets. Spinners allege that, in China PSF is available at Rs 100 a kg FOB China ($1.17 per kg) as against Rs 133 per kg, being charged by Pakistani producers.

Fibre2Fashion News Desk - India

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