Value-added textile sector seeks to set up buffer stock of 4mn cotton bales

ANWAR KHAN

KARACHI: The value-added textile sector wants the government to establish buffer stock of over four million of cotton bales to avoid yarn crisis in the country, as it apprehending at least $1.25 billion decline in export during the current fiscal year.

The fiscal budget 2012-13 left manufacturers and exporters of value-added textile sector disappointed as the government failed to earmark funds for the textile sector, exporters said. They say the shortage of gas and electricity has significantly reduced the apparel export.

"The international cotton price stands at 68 cents per pound while locally it is being sold for $1, which is higher and unviable for value-added textile manufacturers," said Chief Coordinator, Pakistan Readymade Garments Manufacturers and Exporters Association, (Prgmea), Ijaz Khokhar on Tuesday.

He said the country is expected to receive fresh cotton yield this month whereas the hoarders stockpiled million of bales which need urgent selling on the local market to satisfy the apparel sector demand.

In the budget proposals, the sector had asked the government to set up buffer stocks of over four million cotton bales to ensure availability of the commodity on the local market at low rates, he said.

"Unfortunately, the government did not accommodate the proposals in the fiscal budget," he said, adding that the country is already suffering from shortage of gas and electricity which hit the textile manufacturing sector badly. He said scores of manufacturers have stopped booking of new orders particularly for the Christmas and New Year seasons, as they are still unable to produce the already backlogged foreign consignments. "The sector is faced with challenges of power and gas shortage and high-priced raw material - cotton and yarn," Ijaz Khokhar said.

Trading Corporation of Pakistan (TCP) needs a special chunk of funds in the next fiscal year budget to help establish buffer stock of cotton to avoid future cotton and yarn crisis, he said, adding that the government however seems indifferent to its fragile economy and ailing textile industry.

He said the buffer stocks will solve the apparel sector's problems and end the cotton and yarn black-market in the country besides bringing down the commodity's prices in line with the international markets. "The stocks will also protect the growers from exploitation by a certain textile sector," he said.   

Keeping in view the current situation of the country, he said, no buyer was ready to visit Pakistan and place orders for textile products as a majority of exporters failed to ensure timely shipment.

Estimating at least $1.25 billion decline in the apparel export, Ijaz Khokhar said the country is near to embrace nearly 20 percent recession in the manufacturing too, as global orders continue to divert to India and Bangladesh.

"India and Bangladesh have close eye on Pakistan's energy shortage and other problems and make plans accordingly to replace Pakistan's market share," he showed concerns.