After energy crisis, the skyrocketing prices and shortage of cotton have endangered the dollar one billion export orders of apparel products scheduled for June this year, exporters said on Sunday. They held the local cotton traders responsible for increase in the commodity prices and its shortage in the local market bringing the manufacturing of value-added textile products to a suspension.
Whereas the caretaker textile and commerce ministries are mute and apathetic to respond to the rising crisis that is going to hit the local industry and cause shortfall in the current fiscal year''s exports target, they criticised.
Talking to Business Recorder, Ijaz Khokhar, former chairman of Pakistan readymade garment manufacturers and exporters association (Prgmea) said that soaring prices of cotton and yarn have caused severely negative impact on textile garments exports this year.
"Exporters are losing buyers in the world market for not meeting the export shipment targets due to increasing cost of production," he said, adding that when they booked orders from foreign buyers the prices of the raw material were lower than now.
"In June 2007, yarn was available at Rs 480 per 10 pounds which has surged to Rs 630 per 10 pounds, mounting by 30 per cent and cotton was available at Rs 2600-2700 per kg which went up to 3637 per kg in this period," he said.
Expressing fears, he said that local buyers are concerned over losing existing buyers and have completely failed to add new foreign buyers in their business lists. "Future market strategy is still vague to most of the exporters as to what may happen to them in the world market if the prevailing crisis continues," he maintained.
Regarding the closure of foreign buying houses, he said that it is against the national interest and will increase the cost of production by five per cent, as exporters will have to travel to neutral venues to seal deals with the foreign buyers.
Ijaz said that 30 per cent increase in these commodities prices have come from world markets while the local traders drive 70 per cent rise. He accused the local traders of creating an artificial shortage of these commodities so that they could extract maximum profits out of the crisis.
Increasing tariffs of utilities will also give rise to textile garment production cost by 10 per cent, as a result the international buyers will turn towards other countries like India, Bangladesh and China, he maintained.
The country, he said, will not only fall short of the fiscal export target but also fail to generate revenues through export levies, in case exports are reduced significantly due to soaring production costs.
To a question, he said that new orders are not coming to the local exporters due to increasing cost of production. There is a serious shortage of raw material in the local market for future export orders, former Prgmea chairman said.
Appealing to the Trade Development Authority of Pakistan (TDAP), he said that it should immediately set up commercial offices in the world markets to issue guidelines to foreign buyers about Pakistan''s local products. "It should also set up mini display centres in the major world markets where local products could be exhibited to attract foreign buyers," he added.