Cartel lifts yarn prices by 50% after govt unfair tax decision
KARACHI: The yarn manufacturers have established a cartel across the country lifting yarn prices to Rs 1200 per 100 pounds of bag from Rs 800 since the imposition of 10% R&D on import of yarn and fabric- a hike of 50% just in a week to directly hit apparel sector hard.
PRGMEA chief coordinator, Ijaz Khokhar, said though the implementation of another 10% duty’s imposition on yarn would be started from next month yet the additional cost is being included on yarn import deliveries to the apparel sector since the finance minister made announcement in this regard.
He said that even the consignments booked in advance are also being blocked while the local manufacturers have directed their dealers to stop floating new orders till the imposition of additional tax. “PRGMEA appeals the government to revisit the imposition of additional Regulatory Duty decision and take all sub sectors of the textile chain on board before making the final decision because the Prime Minister has yet to meet with the export-oriented industries and hold a last round of talks with them”, said Khokar.
PRGMEA chief coordinator said that prevailing situation clearly indicates that the government is promoting Yarn Cartel, because the authorities did not bother to take their own ministries of Commerce and Textile onboard while making this blunder.
Further, the coordinator stated that these ministries strongly opposed the unilateral proposal of the finance ministry which would hit the whole value-added apparel sector, represented by Pakistan Ready-made Garments Manufacturers & Exporters Association, Pakistan Hosiery Manufacturers & Exporters Association, Pakistan Knitwear & Sweater Exporters Association and Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association.
In addition, chief coordinator said that the textile ministry was fully aware of the fact that spinning sector was making value- addition of just 59% while performance of value addition by woven garments sector was 846% and hosiery and knit garments 616%. This is a very alarming situation because the export is declining constantly from 10% in August 2015 to 4% in September 2015.
He claimed that Pakistan’s export target cannot be achieved because at the moment nobody can predict where the yarn prices would stand in near future. The non-utilization of cheap raw material from China and India will force foreign buyers to move to neighbouring countries.