Textile sector is facing a topsy-turvy situation, as both the spinning and the value-added sectors have locked their horns over the cotton yarn crisis, as both the sides are looking at the prevailing situation through their subtle positions.
The value-added manufacturers are crying for a ban on export of cotton yarn in the wake of rising cotton yarn crisis. The spinners, on the other hand, are of the view that it is not the export but the prices, which are hampering the local availability of cotton yarn.
It may be noted that the power looms industry in Faisalabad has already surrendered to the adverse circumstances and the labourers are protesting on streets after the closure of many power looms factories. The value-added sector, on the other hand, has also joined the chorus protesting against the export of cotton yarn in a gruesome situation like present.
The spinners further argue that the demand of banning the exports of cotton and cotton yarn is frivolous. They have added that the value-added manufacturers are tilting on the wrong end, as it is not the exports but the prices of the cotton yarn disturbing its availability in the local market.
The spinners may be carrying a healthy argument but the value-added manufacturers have stressed the point that the cotton and cotton yarn is being exported from Pakistan to its textile competitors, causing colossal loss to them.
According to them, the entry of investors to the field has perplexed the situation further, as an artificial shortage of cotton yarn is also in the offing, hurting their commitments with foreign buyers ahead of Christmas season. The value-added manufacturers have further pointed out that the spinners were also benefiting from the cheap Export Refinance by causing irreparable loss to the readymade garments and knitwear industry.
The value-added manufacturers have also mentioned that the All Pakistan Textile Mills Association (APTMA) leadership was allegedly fudging the figures in official meetings. They said the APTMA leadership has a stance that 79 percent of the cotton yarn was being consumed locally against an export of 21 percent of the total production.
The value-added manufacturers said the ground situation was contrary to the APTMA stance, as the exports of 20 percent single cotton yarn have shot up to 33 percent from 16 percent. They stressed that the reality would be exposed simply if the government caps the exports level to the APTMA stance of 79 percent (local) and 21 percent (exports). Further, they said the government should notify that the spinners can only exports yarn above 32 single.
It is worth mentioning that the APTMA was agitating that the prices of cotton yarn have spiralled up because of the high production cost arising out the unprecedented electricity load shedding, following by another severe gas load shedding ahead.
The value-added manufacturers, on the other hand, argue that the load shedding of gas was only impacting negatively to the production cost otherwise the power load shedding on independent feeders of textile mills is not more than two hours.
This two hours load shedding, they added, is easily adjusted within a month by managing the load shedding phenomenon through lunch breaks and etc. The value-added is contrary denied independent feeders, which brings heavy losses to the garments units amid worst load shedding duration. Ironically, the government was behaving like a silent spectator over the war of words between the two sides and no tangible step has so far been taken to ensure a balance in the prevailing situation.