The value added textile sector has announced it will close all factories in the country from (January) if a ban on yarn export is not slapped.
The decision came in a special meeting of the Pakistan Hosiery Manufacturers Association (PHMA) with all value added textile associations at the PHMA House on Monday.

Chairmen of at least 14 value added textile associations attended the meeting which included Pakistan Apparel Forum (PAF), Towel Manufacturers Association, Council of Loom Owners Association, Pakistan Textile Exporters Association, Pakistan Cloth Merchants' Association, All Pakistan Sizing Industry Association, Pakistan Cotton Power Loom Association, All Pakistan Textile Processing Mills Association, Pakistan Knitwear and Sweater Exporters Association, Pakistan Hosiery Manufacturers Association (PHMA), Pakistan Denim Manufacturers and Exporters Association, All Pakistan Bed Sheet & Upholstery Manufacturers Association, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) and Pakistan Cotton Fashion Apparels Manufacturers and Exporters Association (PCFA).

The meeting resolved that if a ban on export of cotton yarn up to 32 single counts was not imposed by the Cabinet Committee on Textile, which is scheduled to meet on January 8, all value added textile units would have no alternative but to resort to complete shutdown as a mark of protest. The meeting expressed strong reservations about the government's inactive policy, lack of concern and unrealistic and impracticable decision of the Cabinet Committee on Textile to abolish duty on the import of cotton yarn.

Production of cotton crop has declined globally, showing a shortfall of 4.8 million bales. World's largest exporters of cotton yarn are China, India and Pakistan. Last year, the world was faced with recession while production of cotton was sufficient, the meeting noted. However this year, cotton production has declined. Last year, local consumption of cotton yarn was 80 per cent of the production while 20 per cent was exported.

During financial year 2008-09, 480 million kgs of cotton yarn up to 32 single count was exported, meaning 40 million kgs per month, while this year export of cotton yarn is around 60 million kgs per month. "This means almost 50 per cent of cotton yarn up to 32 single count has already been exported," the meeting was told. "It is an irony that while cotton yarn is being sold locally to the value added textile sector at $2.35 per kg, it is exported at $1.92 per kg."

The meeting rejected the decision of the cabinet committee to scrap duty on import of cotton yarn, calling it an eyewash as cotton yarn could be imported by value added textile exporters under the Duty and Tax Remission for Export (DTRE) Scheme. They unanimously demanded a ban on export of cotton yarn up to 32 single count, otherwise, the industry would be shifted to Bangladesh, Jordan, Sri Lanka, Egypt and other countries.

They said the government should encourage export of cotton yarn above 32 single count as much as that could be exported. "On the one hand, the government is wooing foreign investors while doing everything possible to drive local investors away," a meeting participant said.

Speaking to the stakeholders and media after the meeting, PAF Chairman M Jawed Bilwani said with the export of yarn the fertiliser subsidy provided by the government to the farmers was being passed on to Pakistani competitors - China and Bangladesh.

He said the spinners in a meeting with the Trade Development Authority of Pakistan (TDAP) had agreed on capping yarn export, but later they backed off, leaving the value added sector with no option but to go on strike.

Bilwani said with the closure of value added textile mills, all chains connected with that business would also be shut down.

PRGMEA Chairman Mohsin Ayub Mirza called the dispute between the spinners and the value added sector an economic massacre of 2.5 million workers who were employed in the industry.