Yarn shortage makes Pak exporters nervous

25 Jul '16
3 min read

At a time when international customers are due to place orders for the forthcoming Christmas season, readymade garment exporters in Pakistan are finding themselves in a tight spot as they fear that shortage of cotton yarn in the country resulting in high input costs will render them uncompetitive in the global market.

The apparel industry is facing severe shortage of cotton yarn due to which the local garment industry is not “capable of entertaining international buyers due to the price factor,” media reports quoting Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) chief coordinator Ijaz Khokhar said.

Kohkar also alleged that the shortage of yarn was “artificial” and that had been created by the spinning as well as ginning industry, which were holding stock in the hope of further hike in rates.

“... Mills are reluctant to quote us (prices) despite the fact that we are ready to purchase yarn at prevailing high market prices. Spinning mills are holding stocks on the speculation that prices will go further up amidst high additional regulatory duty on import of cotton yarn,” he said.

Pleading that it was “over burdened” by more than 11% multiple taxes and utility costs, PMRGEA demanded at least 15% special support to stay viable in the international export market, failing which business would be diverted to rival countries such as Bangladesh, Vietnam and Cambodia, Kokhar cautioned.

Seeking a that solid strategy to sustain garment exporters, as the industry was a major forex earner and labour-intensive too, The PRMGEA co-ordinator said at present the exporters were a nervous lot fearing that they would not be able to ensure timely delivery of orders in the wake of “artificial scarcity of raw material.

Big exporters who had been bagging considerable amount of orders were likely to be hit hard if local yarn prices remained high, he said calling for immediate withdrawal l of regulatory duty, custom duty and other taxes on import of yarn form all countries.

There is no harm to import raw material from anywhere because our cotton yield is also 30% less than the last year with lower prediction for current year, PRMGEA said stressing on the need to be modify the textile policy 2014-19 with strong interaction between the government of other stakeholders.

As per PMRGEA data, the apparel sector contributes more than 80% to the total textile exports and employs up to 38% of the total workforce in the country. Compared to this textile exports from Bangladesh had touched $26 billion without even growing a single cotton bale and completely depending on the imported yarn. (SH)

Fibre2Fashion News Desk – India

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