A demand has been made of government by All Pakistan Textile Mills Association (APTMA) and Karachi Cotton Association (KCA) representatives for lifting the ban on export of yarn, as it has adversely affected the spinning sector along with cotton producers.
Gohar Ejaz, Chairman APTMA Punjab Zone, stated that further reduction in the export ceiling from 50,000 tonnes to 35,000 tonnes per month is very much, opposite to the assurance given to the stakeholders by President Asif Ali Zardari and members of the federal cabinet during a meeting that was held in the month of January. He said that APTMA members and other stakeholders were assured that the ceiling limits will not be altered till June 2010.
For all across the value chain, export figures revealed massive growth in exports during the month of January over previous month, and thus it is obvious that there was no logic behind further reducing the yarn export limit by 15,000 tonnes per month.
According to Gohar, it was reasoned that any assistance that needs to be provided to the garment sector should not be adjusted by penalising the spinning sector in form of cap on yarn exports, instead the support should come directly from the government resources.
Also it is erroneous that there exists a ban on export of yarn, while cotton is freely traded. It was just not practicable for the yarn manufacturers to sell the finished yarn at subsidized rate, produced prepared after adding value to cotton, which was procured by them from foreign countries at higher international rates.
There are already in existence many incentives for value-added sector in the form of duty drawbacks, export re-finance and other such assistances.
Shakeel Ahmad, a senior member of KCA divulged that, a hike of around 60 percent has been noted in the prices of cotton in overseas market, with cotton prices now touching 81-81 cents per lb. He also while quoting the value-added sector to be 'most inefficient sector' said that the sector had already gained as prices of yarn declined by 20 percent.
A strong opinion prevailed as to that the spinning industry along with the textile sector and all stakeholders including ginners would be badly affected on account of cotton shortage and also due to ban on export of yarn, Ahmad said.
Doing away with all the restrictions on export of yarn on immediate basis and re-establishing an environment for free trade mechanism, seems to be the only solution to the dilemma, was the unanimous opinion.
Fibre2fashion News Desk - India