All Pakistan Textile Mills Association (APTMA) has shown strong resistance to the proposal of levying Regulatory Duty on cotton yarn’s exports. The association believes the move will disturb the momentum in exports that have been built after decades and will hinder the steadiness of policies supporting export-led growth.

Chairman APTMA Mr. Abdul Rahim Nasir explained in a press statement that a specific lobby that has vested interests is busy creating unnecessary ruckus to impose RD on cotton yarn exports under false pretexts. He said they intend to disturb the rising textile exports which have achieved a historic high, roll back investment of over $ 4 billion and rob the country of the generation of an additional 500,000 jobs forecasted.

He added that sufficient cotton yarn is available for consumption in the value-added sector for the purpose of export which can be seen by the data showing a drop in the cotton yarn export in the last few years while the textile industry has risen to record high exports worth 15.4% billion dollars.

He pointed out that an article in business recorder published on 24th September 2021 reported contradictory and misguided figures. In reality, cotton yarn exports have declined by 25% in quantitative terms from 0.522 million tons (FY19) to 0.390 million tons (FY21) and 26% in value terms.

Furthermore, exports of cotton yarn in the current year have seen a drop of 5% in quantitative terms whereas value has seen an increase of 3% compared to the preceding year.

In the last four years, the exports of cotton yarn have seen a declining trend in quantity as well as value terms based on the data provided by the Pakistan Bureau of Statistics (PBS). The data reflects that locally produced cotton yarn is being utilized in the value-added sector and the export figures further support this conclusion.

Exports from the value-added sector have experienced impressive growth during the current fiscal year, reporting 32%, 19%, 37%, and 29% in towel, garments, knitwear and bed wear exports respectively.

The textile exports are reported to have soared by 23% this year with a 29% growth experienced in the first two months of FY21. Compared to the same period last year, textile exports have reported a growth of 45% in August 2021.

APTMA suggests that rather than considering the levying of RD on the export of cotton yarn, the need of the hour is to provide the supply of raw materials including cotton and man-made fiber (MMF)at competitive rates. The rate of cotton yarn produced in the country is around 3.5 million tons while the domestic consumption rate for value-added products is 90%. Only 10% of the cotton yarn produced is being exported.

APTMA is a firm believer in a free-market mechanism for textile trade throughout the value chain. The association stressed upon the need to import raw materials such as cotton and polyester in order to keep the mills operational and to reach the target of $21 billion set for textile exports especially in the current conditions where cotton and polyester are short by 6 million bales 200,000 tons respectively.

The association strongly opposed the idea of any restrictions on free exports of Greige Fabric, Dyed Fabric and Yarn as it will sabotage export growth as well as industrialization in the country.

APTMA said that it believes only goods made using domestically produced materials should be provided with export incentives. As it will lighten the burden on imports which has put pressure on the balance of trade. Such incentives will also boost industrialization.

The textile industry of Pakistan exports synthetic blended yarn, specialized cotton, as well as finished fabrics to world-renowned brands and large retailers leading to the creation of economies of scale thus, making the textile products from Pakistan extremely competitive in the global markets.

If free exports of fabrics and yarn are discontinued, it will impact the entire textile value chain as it will lead to the shutting down of multiple industries.

Around 1.3 million additional spindles are being integrated into the existing spinning capacity which would lead to an increase of 17% in yarn production rates. Furthermore, the restoration of non-operational and troubled units will boost the availability of yarn for the value-added textile sector.

The freight costs increased four times post COVID-19 causing cotton and Polyester Staple Fibre (PSF) imports to become even more expensive. Polyester container freight China to Pakistan has reached a whopping $ 10,000 from being $ 500 in the pre-pandemic times.

The Chairman urged the Prime Minister Mr. Imran Khan, Finance Minister Mr. Shaukat Tarin, and Advisor to the Prime Minister on Commerce Mr. Abdul Razzak Dawood, to evaluate the current situation and to ensure the continuation of policies that are beneficial for the economy and help the country’s exports.

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