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Unprecede-nted price hike of cotton yarn and polyester fibre have forced thousands of Powerloom units to close down and have made the value-added sector incompetitive in the international market. Exports of textile sectors have dipped during the first five months of the current fiscal. This was stated by Chairman Pakistan Textile Exporters Association (PTEA) Khurram Mukhtar and Vice Chairman Sohail Pasha briefing the newsmen here on Monday.
With the exorbitant hike in the prices of cotton yarn and polyester fibre, the cost of production of value-added items has become prohibitive and the foreign buyers are refusing to place their export orders for Pakistani exporters, they said. Export orders are being diverted to India, China and Bangladesh, they stated, and added, "Our regional rivals are getting Pakistani cotton yarn at cheaper rates and are exporting finished goods at cheaper rates to our export markets.
Thus, by providing our raw material to our export rivals at lesser cost we are axing our own feet, it was contended. Substantiating their arguments the PTEA chief said that price of 20 single yarn has gone up by 30 percent in the domestic market from Rs 660 per bundle to Rs 880 per bundle.
This extra ordinary jump of 30 percent has added heavy burden on the cost of value-added items and the buyers are refusing to absorb additional cost volatility, they said. Challenging the logic of selling cheaper raw material to the competitors enabling them to capture the markets, they said, "Why we are destroying our home industry employing millions of workers and providing livelihood to millions of families. Free trade policy did not mean to kill your own goose and feed the neighbour's dog, they quipped."
The fanciful idea of free trade policy is no where followed in the world. The most liberal capitalistic markets preaching laissez fair have always been safe guarding their domestic industry and internal markets by shunning petty forex earnings, they said.
They also debunked the rhetoric of unemployment in spinning mills and bank defaults. This rhetoric reflected mismanagement, inefficiency excessive reliance on external help, they contended. The number of workers employed in spinning sector was ten times lesser than the number of workers in processing mill.
While the spinning mills employed 400 workers per unit average, the value adding mills employed 4000 plus workers per unit average. Similarly, the forex earned by spinners was five times lesser than earned by value-added sector. It was therefore illogical to claim free trade policy being penny wise and pound foolish. The PTEA chairman urged the government to take adequate measures to reduce the cost of production in the value-added sector and earn more foreign exchange for the country.

Copyright Business Recorder, 2009

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