Exporters fear losing orders due to cotton crisis

Textile body says unavailability of yarn, fluctuations in exchange rate affecting sector

KARACHI:

The textile sector has voiced fear of losing export orders due to unavailability of cotton yarn and fluctuations in the rupee-dollar parity.

In a statement on Monday, Pakistan Apparel Forum Chairman Jawed Bilwani said that unavailability of cotton yarn and abrupt decrease in the value of rupee against the US dollar can collapse efforts made by the value-added garment and home textile segments.

“Due to this, the exporters belonging to the garment and home textile sectors fear a steep decline in exports in the coming months,” he said.

It is pertinent to mention that in the last six months, the dollar has depreciated against the rupee by 5.58% to stand at Rs157.2 at present, while exporters had negotiated and finalised export orders at Rs166.5 per dollar, said Bilwani.

Similarly during the last three months, the price of cotton yarn climbed 15% and still it is not available in the market, he lamented.

“Due to these two factors, exporters are reluctant to register new orders because the cost of the production has risen in the past few months,” he said. “Exporters are taking a dual hit therefore the government should intervene to save the value-added textile export chain.”

Taking notice of the ongoing situation, the government should immediately abolish customs duty on import of cotton yarn to aid the value added garment and home textile exports of Pakistan, said Bilwani.

“The government’s goal is to increase exports and narrow the import bill,” said Federation of Pakistan Chamber of Commerce and Industry (FPCCI) former president Mian Anjum Nisar. “If the country loses textile orders, it will be a huge setback for Pakistan.”

He urged the government to work in the greater interest of the value-added textile chain.

Separately, Pakistan Yarn Merchants Association (PYMA) Senior Vice Chairman Hanif Lakhany said that soaring yarn prices were pushing the textile-based small and medium enterprises (SMEs) to the brink of collapse.

Failure of authorities to review the tariff structure of polyester chain and allow duty-free import of cotton, polyester cotton and polyester filament will be catastrophic for small businesses, he said.

“The textile industry will be ruined if it is not supplied with raw materials at reasonable prices in line with the demand,” he said.

Published in The Express Tribune, March 9^th, 2021.

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