The All Pakistan Textile Mills Association (Aptma), asking the value-added sector to purchase yarn at export parity price, has clearly refused to accept hurdles in the export of cotton yarn. Addressing an emergency press conference at Aptma House here on Tuesday, Anwar Ahmed Tata, chairman of Aptma said that the condition of registration of export of cotton yarn is time-taking and will hamper the export.
Registration of contracts to monitor export of cotton yarn, introduced by TDAP is already being done by Aptma for last 15 years by fixing a Minimum Export Price (MEP), he added. He said that production of cotton all around the world is less than last year, except India, which has about 3 million bales more than its requirement.
Therefore, price of cotton has increased from Rs 3,400 per maund to Rs 4,500 per maund in domestic market ie some 31 percent over the price of cotton just two months ago. He advised the value-added sector to purchase yarn at export parity price and try to pass on the same to their buyers who are capable to understand that the cost of raw material and cost of doing business has increased all over the world.
Tata said that if the spinning industry can run and compete in the international market after importing about 25 percent of its requirement of raw materials why the value-added sector can not compete in the export arena which is already enjoying a number of facilities such as export refinance, LTFF and LTF-EOP, which is not available to the spinning industry.
He said that the government has earmarked more than 90 percent, out of Rs 40 billion incentive package in the Textile Policy, for value-added sector. The Aptma Chairman demanded of the government not to intervene in the export trade and not to take any short-term or ad hoc measures because the consequences would not only hurt the spinning industry only but would also hurt the value-added sector and the whole economy.
He requested the government to analyse the situation for two to three months because value-added sector takes more time to settle and respond. He also denied that any agreement with TDAP on quantitative restriction on export of cotton yarn had been made by Aptma. "We believe in free trade, and are not in favour of any kind of restriction on exports of yarn," he added.
He assured the government that yarn is available in sufficient quantity for the domestic value-added sector to meet their requirements and the agitation of value-added sector on non-availability of yarn for the domestic market and imposition of ban on export of yarn had no ground.
Tata said that the spinning industry is operating, and also competing, in the export market even though about 25 percent of the shortage of raw cotton is met through import. He said: "Total requirement of spinning industry is about 15.5 million bales (of 170 kg) per annum, whereas average production of cotton in the country is 11.5 to 12.0 million bales."
The Aptma Chairman said that although spinning industry was facing shortage of raw cotton but had never demanded ban on export of cotton and it is expected that about one million bales of cotton would be exported this year. He said that current production of yarn for the first four months of this year was around 240,000 to 245,000 tons. "We also urged the government to provide working capital and to reschedule the loans of the sick spinning units so that they could restart operations resulting in more availability of yarn for the domestic market."
He emphasised the government to take urgent measures to finalise the matter of Bt cottonseed to enable the growers to use certified quality of Bt cottonseed for higher production. Tata also demanded of the government to provide level playing field to the spinning industry, so that the only world class industry of Pakistan can earn more and more foreign exchange and play its role in the development of the economy of the country.