KARACHI: Hanif Lakhany, Senior Vice Chairman Pakistan Yarn Merchants Association (PYMA) and Vice-Chairman Farhan Ashrafi, has termed catastrophic for small and medium enterprises (SMEs) over not reviewing the tariff structure of a polyester chain and not allowing immediate duty-free import of cotton, polyester cotton and polyester filament yarn by the government, and feared that the textile industry would be ruined if it was not possible to supply raw materials at reasonable prices as per the production demand.
PYMA office bearers met with a delegation of polyester yarn users, industrialists, importers and traders, raising their concerns, they said that the government is aware that cotton production has declined this year, while the skyrocketing prices of polyester filament yarn, the main raw material for the textile industry, have pushed up production costs to an unbearable level
“As a result of higher prices in the local market, small and medium enterprises (SMEs) have no choice but close their units, if nothing is done to alleviate the pain of super high prices, it may be posing a grave danger to the fragile export growth”, they pointed out
PYMA office-bearers said that we really appreciate that the government is seriously considering measures to tackle the escalation of cotton yarn prices but there is also a need to review the current tariff regime of the Polyester Chain if we really want Pakistan to be truly competitive in the international market.
“Polyester filament yarn is subjected to 11% customs duty, 2% additional customs duty and 2.5% regulatory duty in addition to Antidumping duty ranging between 3-11% despite the fact that local manufacturers of polyester filament can only meet less than one-third demand of the user industry”, they added, these local manufacturers of polyester yarn enjoy tremendous tariff protection at the cost of very large small and medium-sized enterprises to the detriment of our stated public policy to make our value-added industry competitive.
Mr Lakhany and Ashrafi urged the government to immediately remove additional customs duty (2%) and regulatory duty (2.5%) on the import of polyester filament yarn as interim relief. Furthermore, we want a review of the tariff structure on the entire polyester chain to make our user industry consisting mostly of small and medium-sized enterprises competitive to enhance our exports.