Textile production suffers due to non-clearance of import consignments from China

February 25, 2020: Zubair Motiwala, Patron of SITE Association of Industry, has in a press statement, appealed the government to allow early clearance of import consignments containing dyes & chemicals, from China.

He said that Pakistan’s imports from China are of USD 12 billion and mostly comprise of dyes & chemicals which are the basic raw material for the textile sector – the biggest foreign exchange earning sector in Pakistan.

Motiwala said that It is a known fact that prices of raw material are increasing due to consignments stuck up at Chinese ports and other alternative suppliers such as Korea, Taiwan and India have now either stopped supplying or quoting 30 to 35 pc higher prices. Members are complaining that it is becoming difficult to continue production activities due to a shortage of raw material, while prices in the local market have gone up by 50-100 pc.

He further added that in such a scenario, the opportunity of increasing exports has now become the question of survival for local textile industries. Everyone is talking about increasing exports from the country, but the fact is that production cannot be undertaken in the absence of raw material. The value-added textile sector requires an ample quantity of dyes & chemicals to complete processing & finishing of the fabric.  It is obvious that no one keeps the inventory for more than 1 or 2 months due to cash flow constraints as a large number of exporters are stuck up in sales tax refunds. Also, every item doesn’t utilize simultaneously and sometimes, one item is required and some other item available in stock is not needed.

“Therefore, it is feared that exports, instead of increasing with the kind of advantage, it might be the other way round as it is in common knowledge that orders are based on season to season at least for six months in advance and if this price hike continues and consignments are not timely cleared, production would suffer and industries would not be able to complete their orders on time and as per commitment”, Motiwala remarked.

Zubair Motiwala has requested Prime Minister, Finance Minister, and Commerce Minister to foresee this situation and take urgent measures, as import consignments are lying on Chinese ports and Pakistan Embassy and Consulate in China be directed to work in this regard. If the situation prevails, other countries would increase raw material prices further. The govt. should immediately withdraw all the levies and front-loading with immediate effect so that there should be minimum burden on cost escalation on the products which is being sold earlier to this crisis.

Press Release