No let-up in textile sectors woes-Texglobe

LAHORE: Textile entrepreneurs from spinning to value chain are in a dilemma as even after cap on yarn export, the availability of yarn is still a major issue due to shortage of domestic cotton while import at $0.80 a pound is not feasible.

According to official statistics Pakistan produced 12.636 million bales of cotton this year against the confirmed industry requirement of 16 million bales. Out of this 0.975 million bales have been exported, leaving the industry with 11.661 million bales.

All Pakistan Textile Mills Association confirmed that its members have up till now imported 0.563 million bales and the industry still needs 3.775 million bales to meet both the local and export demand.

Chairman APTMA (Punjab) Ejaz Gohar said importing cotton at $0.80 per pound was not feasible as the exports at these rates might be possible but the local disposal of yarn at the rates demanded by the clothing sector was not possible.

He said by capping the yarn exports to 35,000 tons a month the government has tinkered with the open market. He said the spinners cannot subsidize yarn for the clothing sector. He said if the government had sympathy with the value-added sector it should provide subsidy from its own resources.

Former chairman Pakistan Hosiery Manufacturers Association M I Khurram said the value-added clothing sector was trapped by some non-serious players in the field that had put the future of entire textile industry in jeopardy.

He said some clothing sector elements misguided the government that the spinners had engineered yarn rates. He said the incompetent economic mangers fell into the trap without realizing that the cotton rates in the country had increased from Rs3,200 per maund in July 2009 to Rs5,600 per maund now.

At the same time, he added, the global cotton rates had reached a peak of 0.80 cent in February. He said the yarn prices were bound to go up on the basis of high cotton rates. Khurram said the clothing sector should have negotiated higher rates of their apparel from the foreign buyers in the wake of worldwide increase in cotton and yarn rates. He said instead they put pressure on the government to ban yarn exports.

He said the spinners cannot sell yarn at below their production cost. He said many clothing sector exporters negotiated higher rates with their buyers and were comfortably placed. Now that the majority of mills had announced that they would close down in 10-15 days the value-added sector factories are also in deep trouble. Khurram said imported yarn is very expensive and would not suit the local industry.

APTMA chairman Ejaz Gohar said the bluff of the clothing sector was exposed after the government released the export figures for January. He said in January this year the export of fabric increased by 8 per cent, knitwear by 14 per cent, bed wear by 11 per cent, towels by 62 per cent and woven garment by 25 per cent.