Textile exports are the life line of Pakistans economy. Stakeholders along the value chain therefore wield immense power. Battle lines have been drawn amongst the stakeholders on the contentious issue of reducing the yarn export quota.
Millers have threatened to shut down their operations, if export quota for cotton yarn isn restored back to 50 million kg per month, currently limited to 35 million kilograms per month.
In a heavily worded statement, the Minister for Textiles, Rana Farooq Saeed Khan has stated that the government is determined to address the interests of all stakeholders in the industry. He believes that in order to protect local industry, the quota has been reduced to its mandated levels.
Amir Tata, Chairman APTMA believes the government is singling out millers in the textile industry. He claims that domestic value added manufacturers demand has been met and only excess supply is being exported.
APTMA is more than ready to sell all its yarn to the TCP, if anyone thinks that the local millers demand is not been met. This certainly is a massive statement and has thrown the ball back into the millers and the governments court.
On the flipside, the value added manufacturers disagree that local demand is being fulfilled. They claim that millers want to benefit from higher international prices at the expense of the local industry.
Yarn exporters, however, maintain that they sell the produce to local millers at the very price they sell it to the foreign buyers, which takes out a lot of substance from the local millers argument.
Interestingly, the data publicized by the value added sector in its media response to millers, is questionable.
The plea published by the value added sector quoted export numbers for the month of February - details of which haven been released by the Federal Bureau of Statistics yet, according to the stats department officials. This undermines the authenticity of the information.
The millers strike is expected to cause a loss of $15 million to the national exchequer, according to the APTMA. At the same time, suffocating the production capacity of the value added sector may result in the loss of many thousands of jobs.
Its tough to tell the right from the wrong. One thing is clear; the ministry has been unable, so far, to cater the interest of all the participants. It is advisable that such intra-industry issues be settled through mediation in boardrooms rather than slinging mud at each other in the media.
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