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Pakistan, one of the leading cotton producers of the world, has decided to ban stockpiling cotton and yarn by mills to ensure domestic availability of the commodity.
Country’s Cabinet Committee on Textile imposed a 15 percent regulatory duty on export of yarn up to July 12, 2010 to help the downstream textile sector.
However, the decision received widespread criticism from different quarters as they said the decision to ban stockpiling will hurt these vital sectors of the economy.
All Pakistan Textile Mills Association (APTMA) and Pakistan Yarn Merchants Association (PYMA) in a combined statement said, "Textile and spinning mills will bear an estimated loss of Pak Rs 30 billion per month as they also exchange raw cotton among the members to support the value added industry"
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, it said.
"We have to stockpile raw material including cotton bales for readily availability of raw material at doorsteps in order to save time and money", the statement added.
Pakistan’s 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, statement said.
The statement said, before quantitative restrictions on export of cotton yarn, its export share to the total textile sector was around 75 percent.
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", it said.
India, Bangladesh and China are the nearest competitors of Pakistan.
05 June, 2010 by admin