Shortage of cotton yarn risks value-added textile exports

January 5, 2021: Despite big export orders available with the value-added textile sector, the textile manufacturers and exporters cannot operate to their capacity due to a shortage of cotton yarn, which is the basic raw material for the textile industry, besides cotton yarn available stock being sub-standard in many cases.

M. Jawed Bilwani, Chairman of Pakistan Apparel Forum and former central chairman of PHMA, in a statement here on Tuesday, said that for ensuring the availability of quality cotton yarn in sufficient quantity, Pakistan Hosiery Manufacturers and Exporters Association had earlier urged the government to allow duty-free import of cotton yarn to facilitate value-added textile export sector to achieve its exports target. However, he maintained that only regulatory duty was removed that supported the value-added textile sector to some extent.

He said that to fully support this important sector which was the major source of foreign exchange earnings for the country, the situation demanded that 5% customs duty on import of 32 single yarn and below count be removed. Besides, the exporters, manufacturers, and importers should be allowed to import yarn from any country till the shortage of cotton yarn was overcome.

The price of cotton yarn of 30/1 was 235 per pound in Oct. 2020 and in January 2021 it was  260 per pound; there was an increase of 9.62% making the exporters in-competitive.

The Government must accord high priority to the matter in order to turn its policy to enhance export into reality. The Exporters profoundly appreciate the Government for streamlining and fully automating the Sales Tax Refunds which have been working efficiently and delivering 99% result. While the Customs Rebate disbursement has also been done rapidly with the deliverance of 99%. The exporters also request the Government to also streamline and automate the system for disbursement of DLTL/ DDT which should be electronically transferred to the exporters with export proceeds.

M.Jawed Bilwani said the value-added textile export industry contributes around 62% to total exports, provides the highest urban employment particularly to the female workforce, and supports 40 allied industries.

APP