Pakistan: Uncertainty prevails due to yarn shortage

The uncertainty prevails in the value-added textile sector in the wake of yarn shortage on the local market. The manufacturers and exporters demand of the government to allocate a sizeable chunk of funds in the Benazir Income Support Programme for the workforce of this very sector, which is likely to be, laid off for the industrial units closures.

Central Chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), Mohsin Ayub Mirza expressed apprehensions over the possible unemployment could trigger unless the government arranges yarn for the value-added textile sector.

He further said that the government should prepare a plan to feed the retrenched people with sufficient funds from Benazir Income Support Programme in the near future. Criticising the PPP-led government, he said that it has failed to secure the employment of over two million people who serve in different value-added textile units because these units are inching towards closures because of yarn shortage.

He slammed the government for not banning yarn export and said that such anti-textile value-added sector attitude will deprive many of their small and medium sized businesses. He alleged that the government's decision of not banning the yarn export has come under the pressure of a handful "elite class of textile spinners".

Mohsin lamented over the unfolding war against terrorism spilling over into major cities of the country, saying that it has already inflicted huge financial losses on textile garments sector, as foreign buyers are reluctant to visit Pakistan on security grounds. The yarn shortage is being seen as another war against the value-added textile sector which the government has mainly supported until now, he maintained.

The already tumbling sector from increasing cost of output because of high power and gas tariffs with their severe shortages will be no more able to compete with its products on the global market against the apparel items of China, Bangladesh and India, chairman Prgmea said.

Mohsin said that the benefit, which the textile apparel sector could avail from the government's incentive of duty drawback has been overshadowed by the huge yarn export leading to its shortage. Similarly, the benefits of textile policy remained unavailable in the present circumstance.

Urging the FPCCI, he said that it should strongly protest against the proposed increase in power and gas charges from January next year. The present timid attitude of the federation will not solve the industrialists' problems.

He also criticised Trade Development Authority of Pakistan (TDAP), Ministry of Textile and the spinners, saying that none of them is interested to resolve the current yarn shortage crisis. He demanded of the government to ban the yarn export for about maximum three months to relieve the yarn supply to local markets and balance the already exported additional quantity of the yarn during the last five months.

Chairman Prgmea also urged the spinners for easing supply of yarn to local market to protect the local buyers of their 80 percent of yarn. He also appealed to the Chief Justice of Supreme Court of Pakistan for a suo-moto notice of the yarn shortage on the local market, which could lead to closures of a large number of textile apparel units.