Zahid Mazhar, Sr. Vice Chairman, All Pakistan Textile Mills Association (APTMA), has rejected the rumors of a severe shortage of cotton yarn in the country, which could be detrimental to the textile sector and its exports.
He pointed out that during the period from July 2020 to December 2020, as per the data released by the Pakistan Bureau of Statistics (PBS), the total production of cotton yarn was 1,715,665 tons compared to 1,714,175 tons produced in the corresponding period of the last year.
Out of the total production of yarn, only 10 percent was exported in the first half of the current financial year, whereas 90 percent was available for the downstream industry. Out of this, the domestic downstream industry consumes only about 70 percent, and the balance 20 percent remains as surplus.
Moreover, the exporters are allowed to import duty-free cotton yarn under DTRE, Export Oriented, and Manufacturing Bond Schemes from abroad if they find the local yarns expensive.
He added that the real problem was the shrinkage of the local cotton crop, which has witnessed a massive decline over the last few years and this season’s projected production is the worst ever at about 5.5 million bales as against the annual consumption of cotton over 15 million bales and the best crop figures achieved of 14.5 million bales.
Moreover, the prices of the alternate raw material polyester fiber are also very prohibitive due to the imposition of heavy import duties and anti-dumping duties.
The spinners have been hit with a double whammy where the domestic cotton crop has declined to one-third of the highest crop achieved previously. This has resulted in them being compelled to import about 60 percent of their consumption requirement of cotton and also the prohibitive duties on import of polyester fiber.
Cost of Cotton Yarn Up Locally & Globally
Zahid Mazhar further said that as far as the increase in prices of cotton yarn is concerned, it is mainly because the price of cotton has shot up to around Rs. 12,000 per maund (approximately 40 kgs) and the price of imported cotton has also risen to 95 cents per pound, which is equivalent to Rs. 12,000 per maund.
As the spinners are procuring expensive cotton this year from the domestic and the international markets, the cost of manufacturing yarn is also higher than that of the previous year.
The consumers of yarn should not expect the spinning mills to subsidize their costs by providing them yarns below their cost, rather they should explore other avenues to increase their margins, he added.
Mazhar also said that allowing the import of cotton yarn from India, on the one hand, would create a crisis for the spinning industry of Pakistan and lead to the closure of spinning mills. On the other hand, it will strengthen the economy and the spinning industry of India.
He highlighted that India has been violating all the resolutions passed by the UNO and other international organizations and has occupied Kashmir, and the people of Kashmir have not been given their legitimate right of living independently. Allowing Indian Yarn would be like adding insult to their injuries.
He strongly demanded the government not to allow the import of cotton yarn and save the spinning industry of Pakistan. The only sustainable solution is to ensure the abundant availability of cotton and polyester fiber at affordable prices.
Courtesy: Pro Pakistani