Cut in yarn export quota to halt production: APTMA

LAHORE: Terming further reduction in yarn export quota as the last nail in the coffin of the textile industry, the spinners have warned that the entire textile sector would crumble as henceforth yarn production would not be possible.

Chairman All Pakistan Textile Mills Association (Punjab) Ejaz Gohar said there is a cotton shortage of 3 million bales in the country that ordinarily the spinners imported every year. However, since global cotton rates were on a historic high of 80 cents per pound they would not dare to import a single bale because of quota restriction on yarn export and reluctance of the local value-added sector to buy yarn at global rates. In fact, he added, inferior quality yarn from India was priced 10 per cent higher than the rates of domestic yarn.

Talking to The News after emerging from a meeting, he said a local entrepreneur imported 90 containers of yarn from India but to his dismay the length of yarn was 10 per cent less and its quality was inferior to that of Pakistani yarn. Over and above, he added, the rates of Indian yarn were 10 per cent higher. He said the importer had not been able to dispose it in the local market.

He said reduction in yarn quota had sent a wrong signal to the global importers of yarn. He said in fact Chinese and other importers had diverted their orders immediately to higher priced Indian yarn immediately after the reduction in quota.

The APTMA (Punjab) Vice Chairman Akber Shiekh said the new quota restrictions were more repressive than earlier quota restrictions. He said earlier the government imposed restriction of 50000 ton on cotton yarn from January 2010 till June 2010. However, the exporters were allowed to register their orders on first come first serve bases for every month till the ceiling of 50000 ton was reached.

He said under fresh restrictions of 35000 tons of yarn export the government allowed export of 35000 tons on first come first serve basis without any registration of orders, and once the quota limit was reached further exports would be disallowed.

This, he added, had created uncertainty for yarn exporters. He said they were looking for other markets because they were not sure whether their supplier would be able to export the yarn if other suppliers succeeded in exporting the quota amount earlier.

Gohar regretted that the government of Pakistan acted in haste without analyzing the exports statistic. Interestingly, he added, the latest export figures suggested the export of all sub-sectors of textile industry had increased impressively in January 2010 compared with December 2009, barring exports of raw cotton and cotton yarn that had declined by 31.27 per cent and 19.18 per cent respectively.

Otherwise, he added there had been an increase in, exports of yarn other than cotton yarn (17.08 per cent), cotton cloth (8.50 per cent), knit-wear (13.56 per cent), bed wear (10.66 per cent), towel (61.63 per cent), readymade garments (25.25 per cent) and art, silk and synthetic textile (7.12 per cent). He termed the apparel sector hue and cry as baseless in the light of growth in exports of the sector.

He said an emergency meeting of APTMA had been called on Friday March 5, 2010 in which proposals to confront the government in court, resort to agitation or completely close down the spinning industry for three months would be discussed.