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Pak's Faisalabad yarn market confronts severe crisis

12
Jan '12
Pakistan's biggest yarn market in Faisalabad is confronting a severe crisis mainly due to the prolonged power and gas outages and declining textile exports. The closure of several textile units in the country has caused the sales of yarn to drop by 80 percent in the last few months.

With vanishing buyers in the domestic market, textile traders in Faisalabad are forced to export their yarn. Further, the lack of fresh orders flowing in to the textile weaving industry has led to a fall in demand for yarn, while closure of textile industries is delaying cash transactions.

Faisalabad's yarn market supplies raw inputs to several textile weaving units, power looms, hosiery units and other production units in Pakistan. However, the closure of several textile mills is being apprehended to result in a dearth of raw inputs for domestic value-added industry over the next few months, which would negatively impact its performance.

Several industries, mainly spinning and weaving units, are the leading procurers of cotton and yarn. However, power looms have been badly hit due to restraints in the form of energy crisis and waning orders from textile exporters. Rise in production costs persuaded by frequent rise in power tariffs and heavy load-shedding, have raised the concerns of the loom owners.

All these adversities together have led to the near collapse of the yarn market, but exports of yarn are providing some relief to the traders, according to Pakistan Yarn Merchants Association.

Export market and domestic demand mainly govern the yarn prices in the domestic market. Presently, though the home market is not very sound, global yarn prices are reasonably good. So, a drop in prices in local market has led to stabilisation of rates and yarn is now being shipped to world markets.

According to yarn exporters, domestic farmers and ginners should be enlightened regarding quality enhancement, packing, grading, labelling and storage, so as to boost the demand for Pakistani cotton and yarn in export markets.

They add that better quality raw cotton would not only help in curtailing the cost of production and waste material, but would also help the spinners to produce high grade cotton yarn, which in turn would lead to better returns.


Fibre2fashion News Desk - India


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