All Pakistan Textile Mills Association (APTMA) has claimed that yarn prices in domestic market increased as a consequence of increase in price of raw cotton, adding government's intervention in market mechanism would put negative impact on the spinning industry.
Addressing a press conference here on Monday, M. Yasin Siddik, Chairman APTMA Sindh-Balochistan Region, said that cotton price has surged to Rs 3,800 from Rs 3,400 per maund due to increase in price in international market, as a result yarn prices are on the rise for last few months. Last year, cotton price touched a peak of Rs 4,200 per maund and later slid to Rs 3,000 per maund, which led to a crash in yarn prices, he pointed.
He said the spinning industry was still importing cotton to meet domestic demand and but it never asked the government to restrict export of cotton from the country. Criticising the performance of value-added sector, Siddiq said the value-added industry failed in increasing its exports significantly.
"If a county like China can buy yarn from Pakistan, pay freight on its imports and then re-export it to US after vale addition, then why the Pakistani value-added sector can not buy yarn at a lesser rate and compete in international market," he questioned.
He said spinning industry has not demanded a ban on export of cotton or imposition of export duty on cotton, as they realised the best way forward is to let market forces determine prices and there should be no arbitrary fixation of prices to pass on the benefit to one sector at the expense of the other.
"Unplanned gas load shedding has also disrupted supply of yarn as majority of spinning mills are running on gas," he said, adding that textile industry is currently receiving 100 MMCF gas against its total requirement of around 300 MMCF. Siddik said that the mills operating on electricity supplied by WAPDA are still facing eight to 12 hours' load shedding daily, which is creating shortage of yarn supply in the market.
Regional chairman APTMA said analysis of spinning sector's balance sheets for last two to three years clearly shows that the sector had suffered huge losses. However, despite this all the subsidies and financial concessions were given to the value-added sector, he added.
"Spinning industry is the only sector of textile which has invested in BMR to the tune of 5 billion dollar and has upgraded itself to the international standard that is why it is standing on its own without government support in wake of the competition from countries like India and China," he added.
Siddik said that cotton prices in international market have gone up from 0.60 cents to 0.70 cents due to unsuitable weather conditions in the main cotton growing area of Memphis and in certain areas of China, which has reduced the crop size in both the major cotton producing countries of the world.