All Pakistan Textiles Association (APTA) has called for abolition of customs duty on Polyester Staple Fibre (PSF) imports and demanded that local PSF prices should be adjusted to FOB China prices. In a letter sent to the CBR chairman, APTA chief Adil Mehmood has also recommended to include a member of APTA in price determination/monitoring committee.
These steps will ensure proper monitoring of local PSF prices while DTRE hassles will be avoided since imported fiber usage curtailed, he claimed. Moreover, it would cause no loss to the government in terms customs revenue, since the 3.50 percent R&D support, if properly monitored, would make sure that only negligible fiber quantity was imported, he said.
He praised the government move in the form of 3.5 percent R&D support for PSF manufacturers in order to alleviate the current financial crisis faced by the textile sector.
He said the policy makers should realise that dependency on cotton was the primary reason for repeated textile crisis. For the past decade and a half, every year when demand for cotton had outstripped supply, the whole value chain suffered.
Billions of rupees have to be dished out in support and exports have suffered massively. It is high time that the importance of synthetics in world textiles is realised and Pakistan's share is remedied, he maintained. Considering the above-mentioned facts, synthetic fibers and, especially, polyester have to be subsidised as much as possible on an urgent basis, he pleaded in the letter.
According to him, since the local PSF manufacturers have always priced their product a few rupees/kg higher than imported PSF, cost competitiveness has, therefore, been the primary reason for imported fiber's recent success in Pakistan.
Even with local fiber prices considered equal to imported PSF, there is a 22 percent protection available to local PSF manufacturers when FOB China/India prices are considered, which include:
Customs duty on imported PSF 6.50 percent; imported PSF incidental charges 6.00 percent; imported PSF Ocean Freight Charges 6.00 percent; and R & D Support 3.50 percent. APTA believes that if Rs 1.25 billion support given to the PSF manufacturers was successful in achieving the intended trickling down effect, the whole textile chain would benefit considerably, he said.
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