Country may lose $240m monthly
KARACHI: The decision by NA Standing Committee on Textile for three months restriction on holding yarn and raw cotton stocks will hurt these vital sectors of the economy, All Pakistan Textile Mills Association (APTMA) and Pakistan Yarn Merchants Association (PYMA) said Thursday.
"Textile and spinning mills will bear an estimated loss of Rs 30 billion per month as they also exchange raw cotton among the members to support the value added industry", chairman APTMA south zone, Saleem Shahzad said. He said keeping the stocks of raw cotton and yarn is the backbone for textile and spinning sector as they save billions of rupees on price fluctuation, quality and meeting export and domestic orders timely. Shahzad said quality lint is not always available round the clock due to phutti (cottonseed) supply to ginning sector.
"We have to stockpile raw material including cotton bales for readily availability of raw material at doorsteps in order to save time and money", he maintained.
The textile sector is already facing imposition of 15 percent regulatory duty on cotton yarn exports that has resulted in losses of billions of rupees in shape of cancellation of export orders, he added. Cabinet Committee on Textile imposed 15 percent regulatory duty on export of yarn up to July 12, 2010 to ensure yarn availability to the downstream textile sector.
"Textile Minister Rana Farooq Ahmad and economic managers are unaware of the industry and without consulting the real stakeholders are taking decisions", senior member PYMA, Shakeel Ahmad said. Ahmad said before quantitative restrictions on export of cotton yarn, its export share to the total textile sector was around 75 percent. He said due to regulatory duty on exports, around 300 containers of yarn and garments to USA, Europe, Far Eastern nations, China, Vietnam and Hong Kong have been held up at port.
"Around 600 containers are also stranded at different textile and pinning mills in the country for clearance of duty thus billions of rupees have been tied up", Ahmad added. He said only 15 percent of the containers of yarn for export has so far been cleared after paying duty. Around Rs 9.5 billion are at stake and if further restrictions on textile sector will be imposed, the entire industry will collapse and lose export orders of billions of dollars. Indian Bangladesh and China are the nearest competitors of Pakistan and due to ill- natured decisions of the government, number one foreign exchange earning textile sector will face severe losses, he said. razi syed
04 June, 2010 by admin