Apparel makers lament shortage of yarn

LAHORE: The apparel industry is facing severe shortage of cotton yarn at a time when international buyers are planning to place orders for Christmas, said a garment makers' association on Thursday. 

Chief Coordinator Ijaz Khokar at the Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), in a letter to the Commerce Minister Khuram Dastagir, said the local garment industry is unable to entertain international buyers, generally due to the price factor, and especially owing to artificial shortage of cotton yarn. The shortage was created by the spinning as well as ginning industries, which were holding stock in the hope of further hike in rates, Khokar said.

Over-burdened by more than 11 percent multiple taxes and utility costs, the apparel industry demands at least 15 percent special support to stay in the international export market, otherwise all current businesses would be shifted to other countries, he cautioned. “We request Prime Minister’s Directives to the concerned ministries to focus, especially on value-added sector and prepare a solid strategy to get the industry sustained.”

He said the apparel export sector is under severe pressure in the international market due to competition from countries like Bangladesh, Vietnam, and Cambodia. He added that squeezing the apparel export sector would lead to decline in export earnings, coupled with unemployment in the country.

Khokhar said that garment exporters wanted to ship the orders well in time, but were nervous as to the artificial scarcity of raw material. If the orders were not shipped on time, the buyers would go to our competitors offering lower rates, leading to the collapse of our industry.

“The spinning sector has always advocated for a free market mechanism, but where is the free market?” he asked.

Industry demands immediate removal of regulatory duty, custom duty, and other taxes on import of yarn form all countries. There is no harm to import raw material from anywhere because our cotton yield is also 30 percent less than last year, with lower predictions for the current year. The letter demands strong interaction between the government and stakeholders for rectifying the textile policy 2014-19

“The apparel industry is in fact the producer of finished textile products that need protection, as it contributes more than 80 percent to the total textile exports and employs up to 38 percent of the total workforce of the country. The textile export of Bangladesh is touching $26 billion without growing a single cotton bale and completely depending on the imported yarn,” he added in his letter.

Khokhar said that countries all over the world discouraged the export of raw material and allowed importing it, while encouraging value-addition to earn more foreign exchange. But unfortunately, in this country, it was the opposite and essential raw material for value-addition was allowed to be exported.

He asserted that the value-added textile sector should be allowed duty-free import of raw material without any hurdle. The spinners should endeavour to become more efficient instead of demanding import duty on raw material for the producers of finished textile products.