Spinners book $300m fresh export orders of cotton yarn
15 December, 2009
KARACHI: Despite the acute shortage of cotton yarn in the country, spinners have booked $300 million fresh orders for export of the commodity, our sources learnt on Monday. The shortage of cotton yarn has left adverse affect on the value-added textile sector in the shape of high prices of cotton yarn and in some cases even its non-availability has created problems for them to operate their units. The unbridled export of cotton yarn has been worrisome, value-added textile sector pointed out but instead of taking corrective measures to stop its export, its has been continued without any check. Cotton yarn is the basic ingredient of the value-added sector, however high prices has made value-added textile products uncompetitive in the international market and furthermore shortage has been making difficult for them to meet the export orders. Value-added textile manufactures regretted that no action has been taken on part of the government to save the sector from crippling and came hard on Trade Development Authority of Pakistan (TDAP), which has been oblivious to the precarious situation the textile sector is in and is turning a blind eye to the grave predicament which will surely lead to the textile exporters failing to meet their commitments with their foreign buyers owing to non-availability of cotton yarn,” they observed. It is noteworthy that TDAP formed Monitoring Committee to resolve the issue, has rejected the demand of the value-added textile sector to put a ban on the export of cotton yarn and impose any regulatory check. In October, exports of cotton and cotton yarn increased by more than 30 percent amid fall in value addition. Value-added industry had also sought ban on exports of cotton yarn below 32-single count. Since the beginning of last month, cotton prices have jumped up by 600-700 rupees per maund (37.32 kgs) creating a new record for the highest price of lint ever recorded in Pakistan. Similarly, seed-cotton (kapas/phutti) prices also rose commensurately so that the increases in both seed-cotton and ginned cotton prices appeared to rise in tandem with each other. With a net deficit in cotton demand and supply balance sheet in Pakistan this season (2009-2010), it is anticipated that lint prices would show a phenomenal increase, suggests Globe Cotton. Therefore, several ginning factories, particularly in Sindh have closed down or have reduced their working by several hours. Under these circumstances, mills in Pakistan have increased their enquiries for imported cottons and are seeking viable rates from several origins to replenish their inventories. Textile industry and exports have been hit hard by escalating prices of raw material and the cost of doing business has increased considerably. Industry is doubly burdened with price hike as well as the shortages of gas and electricity. Resultantly the productivity and industrial output has decreased and the exporters are unable to fulfill their commitments with their foreign buyers. Textile exports being on decline due to indiscriminate exports of cotton and cotton yarn; it is apprehended that Pakistani exporters would be losing their export markets by conceding advantage to their rival countries. End.
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