KARACHI: The textile exporters on Monday demanded enquiry under judicial commission to probe and unearth the cotton yarn crisis facts by executing detailed investigations and to carry out urgent Forensic Audit on the pattern of sugar crisis.
The demand came at a joint press conference of the Value Added Textile Sector Associations held at PHMA house.
Jawed Bilwani, Chairman, Pakistan Apparel Forum, Riaz Ahmed, Central Chairman, Tariq Munir, Chairman (SZ), Pakistan Hosiery Manufacturers & Exporters Association. Shaikh Shafiq, Chief Coordinator & Ex-Central Chairman, Pakistan Readymade Garment Manufacturers & Exporter Association, Rafiq Godil Chairman and Kamran Chandna, Former Chairman, Pakistan Knitwear & Sweaters Exporters Association, Dr Shahzad Arshad, Chairman, Pakistan Cotton Fashion Apparels Manufacturers & Exporters Association, Aamir Lari, Vice Chairman, Towel Manufacturers Association of Pakistan and Abdus Samad Shekhani, Chairman, Pakistan Cloth Merchants' Association attended and many of them addressed the presser.
They said it is learned that approximately 2 million bales have been sold without sales tax and invoices in the local market. In order to identify the black-sheep and culprits behind the yarn crisis the forensic audit of cotton yarn crisis shall prove it many times bigger scam than the sugar scam.
The entire nation from the parliamentarians, Members from the National & Provincial Assemblies as well as the masses decried the sugar scandal and total cost of sugar produced in the country is of Rs320 billion while the silence over cotton yarn crises faced by Value-Added Textile Sector exporting Rs1,980 Billion worth is suspicious, Jawed Bilwani said.
The Government has closed its eyes wide shut over the hoarding of cotton yarn and cartelisation, which are actionable as per law under the Price Control and Prevention of Profiteering & Hoarding Act 1977 and Competition Act of Pakistan 2010.
It appears that the Government has given complete liberty to Spinning Mills and Yarn Traders for monopoly, abusive dominance for exorbitant pricing and hoarding, he said.
The Price Control and Prevention of Profiteering & Hoarding Act 1977 is self-explanatory which also covers yarn for taking legal action in case of violations. Aggravating crisis of cotton yarn due to its unavailability to the Value Added Textile Export Sector of Pakistan has caused drastic decline in exports pushing the industries to the verge of closure fearing massive layoffs in millions of textile workforce, Bilwani added.
Internationally, prices of cotton have been decreased so do the prices of cotton yarn, however, in Pakistan the prices of cotton yarn have been exorbitantly high with increase in prices of cotton and cotton yarn but have not been reduced in line with the decrease in the global market. It seems that some elements in the Government are playing adversarial and negative role, in contrary to the policies of Prime Minister Imran Khan, to shatter the exports of Pakistan and put lethal blow over the Foreign Exchange earnings because something unusual always happens from the circles of the Government whenever the exports of Pakistan comes in take-off and incline mode.
Advisor Commerce Razak Dawood supported the exporters and regulatory duty was abolished yet custom duty was not removed due to resistance by some elements present in the cabinet, the exporters said.
Complete remedy was not provided to textile exporters who again appealed the Government to allow import of cotton yarn from neighbouring India through land route due to severe congestion of sea traffic and containers.
Announcement of ECC proposal to allow import of cotton yarn from India compelled the local spinners and cotton yarn traders to reduce the prices of cotton yarn yet, however, again some persons sitting in Government criticised and the cabinet defer the said proposal. As a result, prices of cotton yarn were increased again which also reflects hoarding and black-marketing of cotton yarn in the local market.
They said the Ministry of Planning, Development and Reforms is speechless to comment and articulate who is behind this ill-planning and severest ever crisis of cotton which has proven most deadly and destructive for the value added textile sector and its exports.
The value added textile exporters are facing jeopardy and financial hardships as their cost of manufacturing is gone out of control due to dollar depreciation against Pak Rupees from 164 to 153 and increase in prices of cotton yarn more than 40 percent and 700 percent increase in sea freight charges. Further Government's decision for disconnection of gas supply to industrial captive power plants of export industries is also a hanging sword which will destroy investment of billions of rupees. Shifting of industries from gas to national grid is technically not possible as supply of electricity to industries through distribution companies especially K-Electric, which lacks infrastructure of transmission and distribution capacity. K-Electric will require around year and a half to develop and install infrastructure, grid stations, sub stations, high tension power supply lines etc. What would be the fate of industries in such scenario? In summer, electricity demand increases and K-Electric observed load shedding due to high / peak demand. The government must realise that these decisions would only favour our competitors from India and Bangladesh who will take advantage of the situation by attempting to somehow get all the orders achieved by Pakistani exporters shifted to respective countries.
The exporters demanded that the Government must immediately place a ban on export of cotton yarn from Pakistan or impose 10 percent duty on export of cotton yarn from Pakistan and Government also pave way to facilitate exporters to import cotton yarn safely from Central Asian Republics through land route as the sea route is taking prolong duration due to shortage of containers and vessels. Government must also play its role to include the Tajikistan in the Quadrilateral Transit Trade Agreement (QTTA) between Pakistan-China-Kazakhstan-Kyrgyzstan which facilitate the passage of goods and traffic as Uzbekistan sought Pakistan’s support. The import of cotton yarn from Uzbekistan through Afghanistan is also not convenient as due to security reasons and the Uzbek Exporters of yarn demand 100 percent advance payment for which local exporters need approval from the State Bank of Pakistan which is a lengthy process. Import of cotton yarn from Uzbekistan via land route will take hardly one week to reach Pakistan while the sea route will take months.
Copyright Business Recorder, 2021
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