Chairman of All Pakistan Textile Mills Association (Aptma) NWFP, Afan Aziz, has demanded implementation of payment of 1 percent drawback on sale of yarn to large exporters announced under export house scheme in the Textile Policy 2009-14. In a statement issued here on Saturday, he hailed the decision of the Federal Cabinet for allowing free market mechanism and, instead of restricting exports, opted for abolition of all duties on yarn imports into the country.
He said that despite availing a number of facilities the value-added sector of the textile industry has in the past and continues to create hue and cry on one or the other pretext. He dispelled the impression that the country was facing any shortage of yarn. He said that the demand of the value-added sector for ban on export of yarn was aimed at getting yarn rate at cheaper rates, the rise of which was directly a result of steep rise in cotton and other fibre prices throughout the world.
He said that all textile fibre commodity prices have risen beyond their high level reached before the world recession in 2008. He added that since the value-added sector was reluctant to pay higher prices, did yarn export surge in the month of September and October to 70,000 tons mark when the value-added sector corrected this yarn export under the free market mechanism automatically dropped to 50,000 ton mark. He was thankful to the government of Pakistan for realising the situation and to reject the demand for imposing ban on export of cotton yarn, terming the problem cited by the value-added sector as fiction-based.
He attributed the resolution of the problem to continuation of the free market mechanism that cut the export of yarn down by 35 percent. He said that now government under the Textile Policy should implement the decision of the payment of one percent rebate on selling of cotton yarn in the local market. The incentive, he said, would further improve the supply of the commodity in the local market.
Afan said that in case of continued demands of value-added sector on the export of yarn would highlight the inefficiency of that sector. He said that the value-added textile sector of United States, China, Japan, Taiwan, India, Bangladesh and Korea produce better value-added products from the yarn imported from Pakistan.
He said that the value-added sector is receiving different kind of incentives including export refinance, LTF-EOP whereby the value-added sector is given the facility of loan at 7 percent mark-up and they further enjoyed the incentives in the name of research and development (R&D).
The spinning sector has not been given any such facility. Therefore, the value-added sector needs to do some soul-searching that despite receiving heavy subsidies from the government and receiving the cheapest yarn in the world they have serious problems in competing with other manufacturers around the world.
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