Pakistan Hosiery Manufacturers Association (PHMA) has demanded the government to impose restriction on export of cotton and cotton yarn by invoking GATT 1994, Article XI: 2 (b) and XI 2(a). The PHMA leadership stressed that the export of value-added knitwear garments, ready-made garments, sportswear and all other value added products are being badly affected by the export of cotton and cotton yarn.
Central Chairman PHMA, Rana Mushtaq, North Zone Chairman Dr Khurram Anwar Khawaja and former chairmen, including Shehzad Azam and Adil Butt expressed their grave concern in a press conference held at the PHMA office, here on Wednesday. Expressing their apprehension they said that the value-added sector would be closed if export of raw materials like raw cotton were not banned by the government immediately.
Export of value-added textile products have alarmingly declined in the first quarter of the fiscal year 2009-2010, and if this trend continues, it might lead to closure of more industrial units resulting in further unemployment of the labour force, they added.
It may be noted that a large number of factories have already been closed down. The PHMA leadership pointed out that the Ministry of Textile Industry is aware of the alarming situation, but the time for corrective measures is running short.
It looks that perhaps the Ministry of Commerce is unaware of market realities and is not coming up with rescue measures, they opined. They furthermore said that the prices of 20/s, 24/s, and 30/s yarn in the local market have increased by Rs 1800 to Rs 2000 per bag while 10/s yarn has shown an increase of Rs 1500 per bag.
Now about 90% yarn is being exported whereas only 10 percent is left for the local industry. The statement by spinners that only 21 percent yarn is being exported and 79 percent is being supplied to the local market is against the truth. If it is the fact, the government should ensure that same position is capped to save local industry.
It is worth mentioning that export of value-added textiles registered more than 10 percent decrease in the first quarter of the fiscal 2009-2010 as compared to corresponding period last year. During same time, export of raw cotton and yarn were showing increasing trend. Meaning thereby, the capacity of our value added sector is going waste, which is not only national loss by also a heavy job loss for the labour force of Pakistan, they added.
The unemployed labour has already started agitation in Faisalabad, therefore the government should take steps to avert this kind of situation elsewhere in the country, they demanded. It is noteworthy that raw cotton worth 67 cents a pound is converted into a piece of garment worth 5 dollars by the apparel sector but if it faces shortage of raw material, it will no longer survive.
Therefore, the value-added textile industry should not be left at the mercy of blind market forces, which are squeezing the local industry and practically denying the supply of yarn to local manufacturers.
Instead, the muscles of our competitors are being strengthened and reinforced by the way of supplying them the raw material, which is short for feeding to the local value-added sector, PHMA leadership said. The government should follow the policy of prioritising supply of yarn to the local industry because only this way the employment level can be maintained in the industry, they maintained.
Moreover, they said that the already prevailing horrible unemployment is a big challenge for the nation and any more job loss would only add to street crimes and the law and order situation could further deteriorate.
It is important to mention that at present knitwear garment industry in Karachi, Lahore, Faisalabad and Sialkot is the largest employment providing sector in the country and the nation cannot afford to put this sector at risk. The PHMA leadership opined that delayed actions on the part of Ministry of Commerce would cause great national loss. It said further that the international market is not dependent only on the supply chain of Pakistan, instead, it has to hunt from the international market to get a bit of our share which is already only a peanut as compared to size of our country.
They demanded that the Ministry of Commerce should therefore spontaneously respond to the developments taking place in the international market and according to the demands of our own economic structure. We therefore urge the Minister of Commerce Makhdoom Amin Faheem to take notice of the seriousness of the situation without further loss of time.