PYMA demands quantitative cap on export of towel
KARACHI: The Pakistan Yarn Merchants Association (PYMA) on Tuesday demanded the government to set the export price of towel lower than the export price of yarn.
It is pertinent to mention that the yarn sector is already facing export quantitative restrictions imposed by Ministry of Commerce. “The minimum export price of value-added yarn is $3.5 per kilogramme while average export price of towel during October to January 2009-10 has been at $3 per kilogramme,” PYMA member Shakeel Ahmad said. He said the government should set the export price of towel at $2.70 per kilogramme so that the export of yarn may not be affected. Yarn is used in the manufacturing of towels and if one-kilogramme of towel is exported, it would consume less yarn as compared with one-kg of yarn. So in order to provide a level-playing field the PYMA is demanding the minimum export price of towel.
Ahmad said the Cabinet Committee on Textile further capped export of all types of yarn other than cotton up to 35 million kilogramme per month. Under the first cap on export volumes, the government restricted the cotton yarn export to 50 million kilogrammes per month in January, he added.
“The government should impose cap on the quantity of towel exported in order to save the interest of yarn exporters besides spinning sector as these sectors are already facing liquidity crisis,” he added. The decision of the cabinet committee that yarn valuing above $3.5 per kg will be excluded from capping does not make any sense, as the export price of towel is still cheaper than the raw material.
“The export of raw material at higher prices will be affected by the export of the value-added towel at lower prices in the international market,” he said.
The new threshold on export of all yarn is aimed at providing the adequate quantity of all types of yarn to the value-added sector, which has been claiming shortage and high priced yarn in the country, which is putting crippling impact on the downstream textile industries.
He said in the open market economy, there should not be any ban on export or import except ban on import of luxury items.
He said around 75 percent of local yarn is used by the value addition sectors in the country and only 25 to 30 percent coarse yarn is exported to China, Sri Lanka, India, Bangladesh, Indonesia and Thailand.
He demanded the government not to intervene and take any short-term measures because the consequences would not only hurt the spinning industry but would also hurt the value-added sector and the whole economy.
He hoped the decision was temporary and the cap would go once the cotton yarn prices are stabilised in the domestic market. He said total requirements of the spinning industry is about 15.5 million bales (170kg) per annum whereas average production of cotton in the country is 11.5 to 12.0 million bales. Federal Secretary Commerce Zafar Mahmood also said capping the export of cotton yarn is against the World Trade Organisation rules and is challengeable.
03 March, 2010 by admin