Textile exporters urge govt to break cotton cartel

Lament over 40% hike in yarn prices in short span of time

LAHORE:

Textile exporters have requested Prime Minister Imran Khan to give directives for a forensic audit of yarn producers in a bid to break the cartel of cotton mafia similar to the way Pakistan Tehreek-e-Insaf (PTI) government did against the sugar lobby.

In a letter written to PM Khan on Thursday, officials of the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) said that the cotton mafia proved to be stronger than the sugar lobby.

“Manufacturers have hiked rates of yarn by over 40% in a short span of time and created artificial shortage, citing lower cotton production in the country despite a decline in cotton prices in the international market,” they wrote. “This has dented exports of the apparel sector.”

PRGMEA Central Chairman Sohail Sheikh called on the government to take immediate steps to break the cotton cartel in order to give a strong message to all sectors that cartelisation would not be tolerated.

He also urged the Federal Board of Revenue (FBR) and the Federal Investigation Agency (FIA) to conduct raids on warehouses of yarn dealers, who were allegedly hoarding a massive quantity to create artificial shortage and manipulate prices in collaboration with the manufacturers.

He added that the dealers and manufacturers were taking advantage of record low cotton production in the country.

“Another major factor that is affecting exports is the sharp depreciation of the US dollar against the rupee as exporters have quoted annual prices for global buyers at Rs162 per dollar,” Sheikh said.

In addition, a spike in freight charges for sea transport, which had risen by at least 700%, posed further danger to the export-oriented textile sector, he said.