Export refinance scheme: SBP urged to include yarn, fabric in list of eligible items

Khawaja Muhammad Jalaluddin Roomi President of Multan Chamber of Commerce and Industry (MCCI) has asked the Governor State Bank of Pakistan Shamshad Akhtar to include yarn and fabric in the list of eligible items against which export refinance is allowed to resolve this problem.
The yarn and fabrics textile industry is finding it very difficult to procure raw cotton during this season due to tight liquidity conditions and high cost of borrowing. In a letter to SBP Governor, he has said that as a result of liquidity problem, farmers were not getting return of their produce and cultivation of wheat crop is being delayed as farmers are unable to clear cotton from the fields.
He further said sowing of cotton next year would also suffer, as farmers are discouraged with low prices this year. He said that some farmers were exporting their produce to different countries on low rates because there was no buyer in the country due to liquidity problem.
Textile millers, weavers would have to import the cotton on higher rates against precious foreign exchange later to meet their requirements while exports will suffer as high interest rate had increased the cost of production in Pakistan compared to other major textile products exporting countries are making our industry uncompetitive.
He reiterated his demand that yarn and fabric must be included in the list of eligible items against which export refinance is allowed to resolve this problem. Khawaja Jalaluddin Roomi said that we commit to buy the entire cotton crop within the season if our request is accepted. He said that we have already met with Shaukat Tarin, adviser to the Prime Minister on Finance, who has agreed to support us on this issue and also apprised Prime Minister of our grievances regarding high interest rate.