Senate Standing Committee on Textile Industry has recommended extension of 15 percent Regulatory Duty (RD) on yarn export up to August 26, 2010 and directed the Textile Ministry to prepare annual cotton yarn policy setting an export target for Aptma. The Committee, which met on Tuesday at the Parliament House, urged for formulation of a strategy to regulate the export of yarn in the upcoming season.
Federal Minister for Textile Industry Rana Mohammad Farooq Saeed Khan and Secretary Dr Waqar Masood Khan also attended the meeting. The Committee showed resentment about giving free hand to Aptma to export cotton yarn for two and a half months and without imposing 15 percent regulatory duty.
Haji Muhmmad Adeel of Awami National Party raised many questions in the meeting. He termed textile industry a big mafia, which takes loans in billions and afterwards gets it written off from the banks. Secretary Dr Waqar Masood told the meeting that the quantitative restrictions on export of cotton yarn included capping of yarn export at 50 million kg on January 8, 2010 which was further reduced to 35 million kg on February 25, 2010.
He said that export of yarn against valid LCs (on first-come-first-serve basis) opened before May 12, 2010, was duty-free for a maximum quantity of 3,200 tons. He said that the exporters who were allocated quota were allowed to substitute their LCs with cash payment, as well.
"Value added yarn fetching a price of $3.8/Kg or more was allowed duty free up to 1,200 tons. The export has to be made prior to July 25, 2010." he said. Masood informed the meeting that Aptma had approached the Lahore High Court for allowing free export of cotton yarn but the court has given a judgement in ministry's favour.
Federal Minister for Textile Industry said that the ministry's objective is to have a consensus strategy for upcoming season. He said that National Assembly Standing Committee on Textile Industry has also recommended that the regulatory duty on yarn may be extended for one more month ie up to August 26, 2010. The minster said that new cotton crop of Punjab has arrived in the market while the crop of Sindh is not yet ready.
Chairman Senate Standing Committee Senator Gul Mohammad Lot directed the ministry to prepare annual policy for new crop and set export target for Aptma. He said that regulatory duty should be withdrawn after August 26, 2010 with consultation of all stakeholders.