Keeping in view the government’s approval of duty-free import of cotton yarn, exporters have demanded that the leadership open imports from India.
They have also requested the government to extend incentives until the country achieves its yearly cotton production target.
The Economic Coordination Committee (ECC) of the cabinet on Wednesday withdrew customs duty on the import of cotton yarn till June 30, 2021.
In a statement on Thursday, Pakistan Yarn Merchants Association (PYMA) Senior Vice Chairman Hanif Lakhany called for the abolition of additional customs duty and regulatory duty on synthetic yarn to counter the impact of Covid-19 pandemic and steer production activities.
Pakistan Apparel Forum Chairman Jawed Bilwani said that the value-added textile export sector had been requesting duty-free import of cotton yarn since October 2020.
The belated decision would provide only partial relief in view of traffic congestion on sea route, he said, adding that shipments were taking over two months to reach Pakistan’s ports.
“Therefore, we request the government to allow duty-free import of cotton yarn until the country achieves its cotton production target of 10.5 million bales.”
To resolve the cotton yarn crisis, the leadership should also place a ban on export of cotton yarn from Pakistan or slap 10% duty, he said.
He also called on the government to initiate necessary steps and measures to safely import cotton yarn from the Central Asian Republics through the land route by utilising the transit trade agreements signed with regional countries.
He lamented that trade through the sea route was consuming longer than usual time due to shortage of containers and vessels.
“Textile exporters request the government to take notice of hoarding of cotton yarn and cartelisation by the stakeholders concerned in line with the Price Control and Prevention of Profiteering and Hoarding Act 1977 and the Competition Act of Pakistan 2010,” he said.
According to the Price Control and Prevention of Profiteering and Hoarding Act 1977, cotton yarn was included in the schedule of essential commodities alongside sugar, wheat and edible oil, he said.
Therefore, the government must move against spinning mills and yarn traders involved in creating a monopoly, abusive dominance for exorbitant pricing and hoarding, and arrest the culprits by conducting raids.
He also called for conducting a forensic audit, which would prove that the yarn crisis was a bigger fraud compared to the sugar crisis.
“It has been learnt that 2 million cotton bales have been sold without invoices or payment of sales tax in the domestic market,” he said.
FPCCI Central Standing Committee on Yarn Trading Convener Farhan Ashrafi praised the ECC’s decision, but was of the view that additional customs duty and regulatory duty on synthetic yarn should also be abolished to support the textile industry.
Published in The Express Tribune, April 16th, 2021.