The demand for capping yarn export for bringing down prices in the local market to save the textile industry from crisis made by the auxiliary textile industry has been dubbed as "totally uncalled for" by the Chairman of All Pakistan Textile Mills Association (Aptma), Waqar Monnoo.
The demand was raised by All Pakistan Cloth Exporters Association (Apcea), All Pakistan Cotton Powerloom Association (APCPA) and Pakistan Hosiery Manufacturers Association (PHMA).
In a statement to the press issued here, Waqar said that Apcea, APCPA and PHMA are valued customers of Aptma members but the real issue behind their move was to get quality yarn at cheaper rates locally by restricting export, "which is incomprehensible".
He said that spinning mills export yarn to foreign buyers against letters of credit at the best available price of which payment is certain, as against most of the local deals that are made on contract basis where payment is not definite and is mostly procured through agents on credit of longer periods, which is bound to cost more to local consumers.
He said that the importers have to pay freight, insurance, etc which extra cost is not borne by local consumers.
Monnoo said that spinning mills are producing sufficient yarn, which is more than local requirement in the country, and added that substantial quantity of about 1.55 million tons, ie 75 percent of the total production of yarn, is annually available for local consumption.
He rebutted the impression of any shortage of yarn causing escalation in local yarn prices.
The Aptma Chairman said that according to data obtained from Federal Bureau of Statistics, yarn export has come down from 61 million kg in December 2003 to 54 million kg in March 2004 ie a decline of 12 percent.
He said that Textile Commissioner office figures, on the other hand, show appreciable increase of 9 percent in consumption of yarn by auxiliary industry in 2002-03 as compared to 2001-02.
He said that increase in local yarn prices was mainly on account of international increase in raw cotton prices which extraordinarily rose by 25 percent in October 2003 over previous month due to reported fall in the world cotton production and short crop in the country.
Monnoo said that consumption of all fibres, including local and imported available to the spinning industry, indicates that 75 percent of yarn production during past five years was available to the local consumers.
There has been improvement in the local availability of yarn from 60 percent in 1993-94 to 75 percent in 2002-03, whereas export of yarn during the same period appears to be stagnant despite substantial increase in production of yarn due to industry expansion, he said.
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