Leather garment exporters are demanding compensation from the government for the recent Rupee revaluation. This was stated by Fawad Ijaz Khan Patron-in-Chief of Pakistan Leather Garments Manufacturers and Exporters Association. Fawad has said that everyone is happy with a stronger Rupee. This Rupee revaluation will help the government in payments of its debts and consumers will get benefit of lower prices. However exporters will suffer a lot because of stronger Rupee.
Fawad said that the leather garments and goods exporters finalised their prices and orders of their products with their buyers for the coming autumn/winter production during the months of January and February and the exporters cost their products at the rupee-dollar parity of Rs 104=00 to Rs 105=00.
Fawad stated that the timing of Rupee revaluation is very bad for the exporters. Exporters received payments yesterday at between Rs 97=50 to 98=50 which means exporters are loosing around 7.0 percent from their costing. He said that the exporters are already working on very low mark-up because of tough competition. Leather garments and goods exporters buy the imported leathers, chemicals and accessories for the autumn/winter orders during December, January and February for which they have already paid at a parity of around Rs 105=00.
He requested Finance Minister Ishaq Dar to immediately intervene so that Rupee is not further Revaluated. Fawad said at the moment the exporters are making collection for next spring 2015 collection and exporters don't know at what price they should calculate the Rupee.
Fawad stated that with the prices already quoted from January the exporters will make shipments from April till end September for the coming autumn/winter season. He said that the government must compensate the value-added exporters for a six-month period for the exchange loss for the shipments to be made from 1st April till end September 2014. Fawad requested the government to take the following measures to compensate value added exporters.
Increase the duty drawback rate by 4 percent, reduce the SBP export refinance mark-up rate from 8.4 percent to 4 percent, and immediate payment of all Customs Duty drawback, sales tax and income tax refunds. Fawad stated that in order to encourage the export of ultimate value-added goods the above compensation should be only given to them.-PR
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