Value-added garments, home textiles: Exports likely to decline due to yarn shortages, weak PKR

KARACHI: The successful efforts of the value added garment and home textile industries facing jeopardy in the wake of unavailability of cotton yarn and abrupt decrease of value of rupee against dollar.

For the reason, the garment and home textile exporters fearing steep downfall in exports in coming months. In last six months, dollar has also depreciated against Pak Rupees by 5.58% from 166.5 to 157.2 while exporters previously had negotiated and finalized their export orders at dollar rate of PKR 166.5. Similarly, during last three months, cotton yarn 30/1 prices have been increased by 15% and that also is not available in the market. Due to uncertainty and recurring fluctuations rupee dollar parity, exporters are reluctant for new orders as both are uncertain about the cost of the product. Exporters are hurting from both sides, therefore, Government must intervene to save the value added textile exports. The gravity of situation demands the Government to immediately abolish Customs duty on import of cotton yarn in the interest of value added garment and home textile exports and the country. This is demanded by Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum & Former Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association. Despite decline in cotton crop and acute shortage of cotton yarn, spinning mills have exported 209,290 Metric Tons during last seven months of Fiscal Year 2020-21. Value Added Garment and Home Textile Export Sector fervently appealed to restrict exports of cotton yarn which is basic raw material as yarn exporters are exporting coarse count yarn which involves cotton and gas which all are short in our country, he said.

The Value Added Textile Sector is continuously drawing the attention of the Government, through appeals and press statements, towards unavailability and shortage of cotton yarn - which is basic raw material since last five months but to no avail.

Inconsiderate response tantamount to Government's lack of priority and non-seriousness to enhance value added textile exports which contribute to around 62% in total exports, provides 42% urban employment particularly to female workforce who mostly are widows and orphans, earns highest foreign exchange and supports approx. 40 allied industries.

During Feb 2021, 4.5% decrease in exports endorse the view point of exporters that unavailability of cotton yarn will shatter the export orders in hand which will eventually be diverted to other competing countries if the cotton yarn is not made available in required quantity. Once the buyer is diverted to other country, it is next to impossible to bring them back. The Government policy should be attractive to invite buyers to Pakistan instead of discouraging them to divert to other countries.

The textile exporters are also highly perturbed over the dubious dealings of spinners who have taken advance payments with commitments to supply cotton yarn but have dishonoured their commitment to supply cotton yarn and if yarn being supplied is of sub-standard quality. Lack of cotton yarn's simply means decline in value added textile exports.

The exporters also lamented that whenever the value added garments and home textile industry takes off with its full potential, some adverse thing happens. Pakistan should learn from the experience and policies of Bangladesh to enhance exports whereby the Bangladesh Government supported the Value Added Apparel Sector while in Pakistan the Government instead of encouraging the value added sector is supporting the spinning sector. The Manifesto of the PTI Government led by Imran Khan Prime Minister to create millions of employment can turned to reality by supporting the Value Added Garment Sector which only holds such potential being highly labour intensive.

He articulated on one hand Government wants to enhance the exports while on other hand appropriate measures have not been taken to provide cotton yarn.—PR

Copyright Business Recorder, 2021