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KARACHI: Senior Vice Chairman of Pakistan Yarn Merchants Association (PYMA), Hanif Lakhany and Vice Chairman Farhan Ashrafi have termed not reviewing of the tariff structure of polyester chain and not allowing immediate duty-free import of cotton, polyester cotton and polyester filament yarn by the government as catastrophic for small and medium enterprises (SMEs).

They feared that the textile industry would be ruined if it was not supplied with raw materials at reasonable prices as per the production demand.

In a meeting with a delegation of polyester yarn users, industrialists, importers and traders, raising their concerns, they said that the government is aware that cotton production has declined this year, while the skyrocketing prices of polyester filament yarn, the main raw material for the textile industry, have pushed up production costs to an unbearable level.

“As a result of higher prices in the local market, SMEs have no choice but to close their units, if nothing is done to alleviate the pain of super high prices, it may pose a grave danger to the fragile export growth,” they pointed out.

They said they really appreciate that the government is seriously considering measures to tackle the escalation of cotton yarn prices but there is also a need to review the current tariff regime of the Polyester Chain, if we really want Pakistan to be truly competitive in the international market.

“Polyester filament yarn is subjected to 11 percent customs duty, 2 percent additional customs duty and 2.5 percent regulatory duty in addition to Antidumping duty ranging between 3-11 percent despite of the fact that local manufacturers of polyester filament can only meet less than one third demand of the user industry,” they said and added, these local manufacturers of polyester yarn enjoy tremendous tariff protection at the cost of very large small and medium size enterprises to the detriment of our stated public policy to make our value added industry competitive.

Lakhany and Ashrafi urged the government to immediately remove additional customs duty (2 percent) and regulatory duty (2.5 percent) on the import of polyester filament yarn as an interim relief. Furthermore, they demanded a review of tariff structure on the entire polyester chain to make user industry consisting mostly of SMEs competitive to enhance exports.

Copyright Business Recorder, 2021

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