The speculators have virtually taken over the local cotton and yarn market where rates of almost all yarn brands and counts have gone up by Rs 15 to Rs 70 per bundle during last 15 days, which is an unprecedented hike during last decade. APCPA Chairman Akhlaq Ahmad said, "Having increased yarn prices by about 25 percent in the past two months, by Rs 15 to 70 per bundle, by spinning mills is totally unjustifiable.
The beleaguered exporters are neither in a position to pass on the increased cost to the buyers nor absorb it." He urged the spinning mills to reduce yarn rates, considering the situation, and follow a win-win approach for sustainability of the value-addition business.
"If the spinning mills are not considering the genuine appeal for reduction of yarn rates, garment exports will go out of the country and buyers will turn their attention to our main competing countries, like China, Bangladesh, Pakistan, Vietnam, and Cambodia," he said. It was also noticed that the new exporters and small power loom owners were the worst hit. Those who had a chain of business, purchasing yarn on behalf of their foreign buyers, are also in hot waters due to uncertainty in the cotton yarn market.
Akhlaq said that the unhealthy yarn trade activity in domestic market was a part of conspiracy against Textile Policy as well as the Trade Policy, adding fuel to fire in hiked prices of yarn, creating law and order problems due to unemployment, creating declining trend in value-added textile products and sinking investment of billions of rupees in power looms and the weaving sector.
He said that after the increase in the prices of cotton yarn, a number of small power loom units had reached the verge of closure because the exporters are not in a position to purchase cotton yarn from the market at high prices to fulfil their export orders. He demanded of the government to immediately impose ban on export of cotton to stabilise its prices.
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