Short supply of raw material adds to textile industry's woes

Short supply of cotton and man-made fibers (MMF) is likely to put textile industry into a turbulent situation in the month of March, said industry circles. According to them, the industry is heading towards a situation where no raw material would either be available and if it is there, it would be too expensive to procure and consume in order to keep the industry wheel moving.
The cotton prices have hit through the roof, hitting the abnormal level of Rs 13,000 per maund against Rs 3,500 per maund, correspondingly almost three times higher. Similarly, prices of MMF have jumped to Rs 200 per kg against Rs 70 per kg last year. A price increase in the cost of raw materials has upset the production capacity of majority of middle range mill owners.
Meanwhile, the All Pakistan Textile Mills Association (APTMA) has deplored the short-sightedness of Polyester Staple Fibre (PSF) manufacturers, causing hurdle to the growth of textile industry and hampering the long term growth potential of man-made fibers in the country.
It may be noted that the PSF manufacturers have turned down the Ministry of Textile Industry proposal of withdrawing litigation relating to anti-dumping duties on PSF import. The Ministry of Textile Industry had asked the PSF manufacturers to do so to meet textile industry fibre shortage, both cotton and man-made fibers.
Some four PSF manufacturers in the country are aware of shortage of PSF manufacturing capacity in the country for next two years and they are not listening to the Ministry of Textile Industry to continue with their monopolistic strategy in order to benefit from the situation, said industry circles.
On the other hand, the Indian cotton traders, in connivance with the Indian government, have recently committed an engineered default by delaying shipments of one million cotton bales. APTMA is crying for release of cotton by Indian exporters to honour the November-December 2010 contracts.
The energy crisis has played havoc with textile industry and a good number of textile mills have already closed down since 2007. High mark-up loans, amidst non-availability of working capital, are adding fuel to the fire.
The industry circles are of the view that only big business houses are able to survive the situation while leaving rest of the industry into lurch. They have urged the government to intervene the situation immediately and bail the industry out of burgeoning raw material crisis.