LAHORE: The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) stressed the need for continuing duty-free import of cotton and cotton yarn from all over the world till the country becomes self sufficient in the raw material.
PRGMEA newly-elected regional chairman Sheikh Luqman Amin stated that Pakistan has been unable to achieve its full exports potential due to lack of product diversification and limited access to raw-material. All taxes and duties on cotton yarn import should be terminated on long-term basis to achieve price competitiveness and product diversification, he added.
He said the Economic Coordination Committee (ECC) of the Cabinet had announced to withdraw customs duty on import of cotton yarn in April this year for the period of three months in order to ensure smooth supply of it to the value-added apparel industry. The government’s earlier move of withdrawing five percent regulatory duty in Dec 2020 on the import of cotton yarn, and then removal of customs duty in April 2021 greatly supported the apparel sector and contributed to the country’s economic stability, which needs continuation, he added.
“As the relief has been withdrawn after June 2021 amidst shortage of cotton, export growth is expected to be affected severely, which should be avoided at any cost,” he said.
PRGMEA Chief Coordinator Ijaz Khokhar appealed to PM Adviser on Commerce and Investment Abdul Razak Dawood to put this demand of PRGMEA before the ECC once again for the continuation of taxes and duty-free import of cotton and cotton yarn from across the world as shortage of yarn still persists and the exporters are presently not booking foreign orders due to scarcity of raw material.
At a time when the exporters are facing financial crunch in the wake of 700 percent jump in sea freight charges and uncertainty in Rupee-dollar exchange rate, the duty-free raw material would provide some cushion to the apparel sector, which is suffering a huge shortage of industry raw material, he observed.
The PRGMEA still thinks that the real solution of raw material shortage lies in opening of import through land route, as cotton yarn import via sea can never become the substitute of extremely low-cost yarn via land route particularly in the wake of exorbitant hike in freight rates of shipping lines, he added.
PRGMEA regional chairman asked the government that previous relaxation of customs duty on yarn import should not have been limited to just three months, rather it should have been continued until the country is capable of meeting textile value-added industry’s demand of 10 million cotton bales.
He said the apparel industry has stopped to book orders, as the exporters are no more capable of entertaining the international market generally due to price factor and especially because of artificial shortage of cotton yarn created by the spinning industry which was holding stock in the hope of further hike in rates.
Sheikh Luqman Amin requested the Prime Minister to direct the ministries concerned to focus on the value-added apparel sector and prepare a solid strategy to help the industry stay afloat.
He said the country has been unable to achieve its full exports potential due to lack of product diversification and limited access to raw-material. To this effect, he added, the all taxes and duties on cotton yarn import should be terminated on long-term basis so that exporters could be able to achieve price competitiveness and product diversification.
As the country receives huge exports orders, local production of cotton is not sufficient to meet the demand of the textile. Cotton was not available at competitive prices due to the CD and hectic procedures.
Copyright Business Recorder, 2021
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