No relief to clothing exporters from curbs on yarn exports
27 Jan '10
2 min read
As the domestic yarn prices witnessed further hike on account of 33 percent production fall due to the power and gas shortages, the government's move to set yarn export limit has failed to offer relief to the clothing sector.
The government imposed this restriction, at the time when, the value-added clothing sector needed assistance instead of pressure.
Every year during January, textile buyers across the globe place orders for Spring and Summer seasons. These purchasers were ready to purchase the products at high rates, considering the high prices of yarn.
But, yarn output was already witnessing plunge when the government put curbs on its exports and, on apprehensions of a fall in yarn prices the international apparel buyers turned down their offers of higher prices to the value-added garment exporting sector.
These buyers asked exporters, either to accept lower prices or cancel the orders, which forced the exporters to accept the orders at a loss as most of the exporters were left with no choice.
The exporters would not been able to avail low-interest export refinance facility if they would have refused to accept the orders, as these low interest rates can only be availed by a benchmark performance on the export front.