Khawaja Muhammad Jalaluddin Roomi former Punjab Minister for Industries and ex-President of Multan Chamber has reiterated his stand on free market mechanism and regretted imposition of quota on export of cotton yarn. Talking to newsmen here on Monday. He said the government has imposed quota of 50,000 tons per month on export of cotton yarn, but no relief or advantage has been given to the exporters of cotton yarn.
The government is providing duty drawback facility on exports of dyed fabrics @ 1 percent, 2 percent on export of home textile and 3 percent on garments and hosiery in addition to reduce mark-up rate facility @ 7.5 percent in the shape of export refinance, whereas neither export refinance facility nor duty drawback incentive is allowed to spinning industry. He urged the government to provide at least 2 percent rebate on sales of cotton yarn to down stream industry instead of exports.
Roomi informed the press that the downstream industry of China and India are competing in the int'l market even though they are getting yarn at much costlier rate after payment of duty on its import, while our industry is getting yarn at cheaper rate.
Jalaluddin Roomi urged the govt that it should encourage supply side of the spinning industry by providing relief to the sick and closed units, and also encourage the establishment of new spinning units by reducing mark up rate to single digit on long term loans.
Jalaluddin Roomi informed, during last 3-4 months, production of yarn has increased to 245,000 tons per month, out of which, requirement for down stream industry is 110,000 tons per month, weaving sector consumes 60,000 tons per month. Hence, there is additional yarn (25,000 tons) per month available after imposition of quota of 50,000 tons per month on export of cotton yarn.
He urged the government to provide duty free import of man-made fibre and abolish all the countervailing measures in this regard to reduce load on consumption of cotton and encourage usage of synthetic (man-made) fibre from 50-50 to 80-20 as the case in other countries.
"Because of the restriction on export of cotton yarn the spinners would be reluctant to import cotton and it is feared that there will be shortage of raw cotton and yarn from April onward, as the industry has cotton only up-till March this year," Roomi added.
He informed that as per SRO 26(I)/2010 dated 14th February 2010, exporters of value added yarn, ie, (Lycra; dyed; heather; grey or melange; slub; and bleached or binged) to whom monthly ceiling of fifty million kilogram, shall not apply, are facing difficulty while registering their contracts with TDAP and subsequently with Customs at the time of shipment as customs is asking for contract or NOC from TDAP.
In this connection, he further informed, the exporters of yarn specified in clause (c) of the SRO 26(I)/2010 are asked to provide Certificate from Ministry of Textile Industry for each shipment/consignment while the SRO under reference clearly states that the exporting units of said yarn are "registered with the Ministry of Textile Industry and the consignments are certified, to any of those specified in sub-clause (i) to (v), by accredited laboratories". He urged the government to allow export of Yarns specified in clause (c) as per directives of SRO 26(I)/2010 of 14th January 2010.