Apparel sector takes a hit: Yarn prices rise after levy of extra duty

Garment manufacturers ask govt to scrap additional regulatory duty

LAHORE: Prices of cotton yarn have increased around 16% to Rs11,500 per bag of 100 pounds from Rs9,950 in the last one and a half months as local manufacturers are blamed for forming a cartel and taking advantage of 10% additional regulatory duty on yarn imports.

Pakistan Readymade Garment Manufacturers and Exporters Association (Prgmea) Chief Coordinator Ijaz Khokhar said prices of 10-count single yarn had increased almost 16% and same was the case with other varieties of yarn.

Khokhar asked the government to take preventive measures as the export target of $25 billion could not be achieved in the last fiscal year due to high energy costs and discriminatory import duties on the industrial raw material.



“Prgmea appeals to the government to abolish the additional regulatory duty on cotton yarn that should be imported freely from anywhere, as it is hitting the whole value-added apparel sector, especially due to limited availability of cotton, which is being exported without any hindrance.”

He said the government should also impose a ban on the export of raw cotton and cotton yarn for a short period till the arrival of new crop to rationalise yarn prices in the local market.

As the apparel sector already had a very limited production line owing to the lack of latest fabric varieties at the local level, the harsh duties were causing a decline in apparel exports, he added.

Addressing the prime minister, Khokhar said Nawaz Sharif had committed to holding meetings with the export-oriented industries but no step had been taken so far.

“We don’t see any improvement in the present scenario, rather the fall in exports will further aggravate as the textile ministry is operating without a minister.”

The government should take drastic steps for enhancing exports and addressing problems of the industrial sector as top priority, said the Prgmea chief.

He demanded that the government immediately appoint a textile minister as the uncertainty was adversely affecting the entire sector, which contributed more than 54% to total exports of the country.

The textile sector had become the most important, particularly after the grant of GSP Plus status, and it needed extraordinary focus, Khokhar said.

Prgmea feels if the Ministry of Textile Industry is given full powers and a minister is appointed immediately, it alone can, in consultation with the stakeholders, reduce the trade deficit by enhancing exports sharply.

Published in The Express Tribune, July 19^th, 2016.

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