ISLAMABAD: All Pakistan Textile Mills Association (APTMA) has strongly opposed the move of imposing Regulatory Duty on the export of cotton yarn. According to the association, it would not only distort the momentum gained in exports after decades but will disturb the continuity of governmental policies for export-led growth.
Abdul Rahim Nasir (Chairman APTMA) who kept silence on Commerce Ministry's idea of RD on export of cotton yarn, has now said that a certain group with vested interests are busy making unnecessary hue and cry for levying RD on the export of cotton yarn on false pretexts with the intent to agitate the historic high trend of textile exports, roll back investment of more than $ 4 billion and to deprive the country of projected additional 500,000 jobs.
In a statement, he emphasized that cotton yarn is sufficiently available in the country for consumption in the value-added sector for export purposes which is evident from the fact that cotton yarn export has declined in past years, resultantly textiles have achieved historic high exports of 15.4 billion dollars.
Commerce Ministry has claimed that Pakistan exported cotton yarn, worth $ 1 billion in FY 2020-21.
However, APTMA is of the view that cotton yarn exports have decreased by 25% in quantitative terms from 0.522 million tons (FY19) to 0.390 million tons (FY21) and 26% in value terms. Exports of cotton yarn in FY21 have decreased by 5% in quantitative terms while value has increased by 3% as compared to FY20.
According to PBS data, over the last four years, cotton yarn exports are on a declining trend both in quantity and value terms. It showed that cotton yarn produced domestically is being used in the value-added sector which is evident from exports figures. The exports of the value-added sector have shown remarkable growth during FY21, registering 32% in the towel, 19% in garments, 37% in knitwear, and 29% in bed wear exports.
The textile exports have increased by 23% in FY21 while registering 29% growth in the first two months of the current fiscal year. In August 2021, textile exports have registered a growth of 45% over the same period last year. Instead of considering any idea to impose RD on cotton yarn export, there is an urgent need to ensure the supply of basic raw materials (cotton and MMF) at competitive rates. Domestic production of cotton yarn is about 3.5 million tons and local consumption is 90% for value-added products while only 10% is being exported.
APTMA says that it believes in a free-market mechanism for textile trade all across the value chain. In a scenario, when cotton is short by 6 million bales and polyester is short by 200,000 tons, these raw materials need to be imported to keep the mills operating normally to achieve the textile exports target of $ 21 billion.
Copyright Business Recorder, 2021