KARACHI: Leaders of the spinning industry on Tuesday claimed that during the month of November 2009 cotton yarn was available in abundance and even after meeting export commitments of 59 million kg out of total production of 241 million kg around 182 million kg was available for the value-added textile units.
They further said that the value-added textile industry consumed only 120 million kg and around 60 million kg were converted into cotton fabrics.
Addressing a press conference at the Aptma House chairman Anwar Tata, Vice-chairman Shahzad Ahmed and chairman (Sindh-Balochistan zone) were highly critical of the strike call given by the value-added textile sector leaders for Saturday, Jan 9, 2010.
Spinners’ leaders reiterated that it was not the issue of availability of cotton yarn in the domestic market but of high prices, which were driven by market forces and not by the industry or producers.
They accused the downstream industry of suffering on their own account for speculating wrongly and entering into export commitments without proper cover. It is a ‘bad business’ practice of the value-added sector, which made them to suffer but now they want the spinners to pay for their wrong business decisions.
They further said that cotton yarn prices per pound of 20 single count in India is Rs120, whereas the same is available at Rs95 per pound in Pakistan, which indicates that Pakistani yarn is still cheapest in the world.
The government’s decision to withdraw 5 per cent import duty on yarn was a step towards right direction because even Aptma members of downstream industry are importing yarn from India.
These leaders strongly objected to imposition of ban or capping on export of cotton yarn as being demanded by downstream industry and said that prices of end-products had already been increased by their European, American and other buyers.
They feared that any government intervention in the free market mechanism will be extremely damaging because it will disrupt value-added goods prices, which are now increasing in the world market.
Leaders of spinning industry claimed that in such a situation downstream industry would be the biggest loser because higher cotton prices in the world market have pushed yarn prices higher and now it has tickled down to value-added goods.
Even today cotton fabrics worth $1.3 billion are being exported per annum and this indicates that downstream industry could not consume this quantity and it is exportable surplus. It is the fabrics, which the value-added sector consumes and not yarn, they maintained.
The spinners, they said, had been importing around three million cotton bales for the last so many years and yet they competed in the world market even without having research and development (R&D) support and export refinance at cheaper mark-up.
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