Apparel manufacturers seek 5pc regulatory duty on yarn exports

The apparel manufacturers showed some flexibility during a meeting held last week with the spinning sector representatives at the Textile Ministry, they said.

After holding negotiations, they softened their stand on imposition of regulatory duty on yarn exports and sought 5 per cent duty instead of their earlier demand of higher rates of the duty, the officials said.

The spinners, however, strongly opposed the regulatory duty on yarn, terming it impractical. “Pakistan simply cannot impose duty on yarn exported to China as it is prohibited under the free trade agreement between the two countries,” said Akber Sheikh, former chairman, All Pakistan Textile Mills Association, Punjab Zone.

Around 60-70 per cent of the Pakistani yarn is exported to China, he said.

Leading knitwear exporter Sheikh Zafar Mehmood said that the apparel sector needs additional support to stay competitive in the global market.

Ejaz Gohar, Chairman, APTMA Punjab, said that the yarn quota has failed to control rates as it is linked with the cotton rates. “Yarn rates increased from Rs760 per 10 pounds in June 2009 to Rs1,260 per 10 pounds in April because the cotton rates increased from Rs3,350 per maund to over Rs6,700 per maund,” he said.

The increase in yarn prices is much less than the increase in cotton rates. “The spinners have stopped buying cotton from the international markets after imposition of the quota,” he said.

Fearing slow uptake of cotton by local spinners, the farmers have also opposed imposition of yarn quota.

“We support free market economy that has helped farmers in getting global rates of their produce,” said Hamid Malhi, a farmer. Farmers want free export and import of cotton and support free export and import of yarn.

Shahzad Azam Khan, former chairman, Pakistan Hosiery Manufacturers Association, said that the spinners have shown flexibility during the meeting by agreeing to restrict yarn exports to a certain limit that would be determined in consultation with other stakeholders.

The value-added sector realises the importance of the spinning industry, but it does not favour exploitation of the value-added sector. “Both the key sectors got carried away during the recent crisis,” he said, adding, “Now is the time to work with cohesion in the larger interest of the textile sector.”

Leading yarn and knitwear exporter M I Khurram said that some elements distorted the statistics to mislead the government.