PRGMEA Says Surge In Yarn Prices Hitting Apparel Sector

Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) chief co-ordinator Ijaz Khokhar said that a surge in yarn prices by almost 25% has hit the apparel sector hard.
He said the cotton yarn prices have increased by around 25% to Rs11500 per bag of 100 pounds from Rs 9950 during the last one and a half months due to cartelization of local manufacturers who are taking advantage of 10% additional regulatory duty on import of yarn.
The PRGMEA Chief Co-ordinator has asked the government to take preventive measures, as the export target of $25 billion could not be achieved in last fiscal year of 2015-16 due to high energy cost and discriminating import duties on industry raw material.
“The PRGMEA appeals the government to abolish additional regulatory duty on cotton yarn that should be imported freely from anywhere, as it is hitting the whole value-added apparel sector especially due to limited availability of cotton which is being exported without any hindrance.”
The government should also impose ban on export of raw cotton and cotton yarn for a short period till the arrival of new crop to rationalise the rates of yarn in local market.
As apparel sector already has a very limited production line owing to lack of latest fabric varieties at local level the harsh duties are resulting into significant decline in apparel export, he added.
Ijaz said that apparel industry is already suffering with the low productivity due to shortage of cotton, high energy cost, and discriminating import duties on the industry’s raw material.
He asked PM Nawaz Sharif to personally direct policy makers to work for reduction in all input costs, otherwise the export-oriented industries would not only shut down their operations, but millions of workers would also lose their jobs.
He said that the PM had committed to hold meetings with export-oriented industries on quarterly basis, but no such meeting was held so for, leading to decline in export massively.
“We don’t see any improvement in present scenario rather decline in export will be further aggravated as textile ministry is operating without its minister.” He said the government should take drastic steps for enhancing exports and addressing the problems of the industrial sector as the top priority.
The value-added textile industry demands the government to appoint textile minister immediately, as uncertainty is negatively affecting the whole textile sector which contributes more than 54% share in total exports of the country.
He said that textile has become the most important sector especially after grant of the GSP Plus status by the EU countries, as 80% items, having free market access, related to this sector and it needs an extraordinary focus.
Ijaz Khokhar said that all the regional competitors including India, China and Bangladesh have separate ministries of textile and Pakistan must follow the suit.

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