Govt moves to resolve yarn crisis

KARACHI: After wheat, sugar, gas and power shortages, the country is now facing shortage of yarn, a basic raw material for value-added textile sector, and there is an increase in cotton yarn prices.

Minister for textile industry Rana Farooq Khan on Wednesday convened a meeting of stakeholders, including value-added sector and spinners to resolve the issue.

Sources told Dawn that the spinners took a stiff stand and were of the view that since they have suffered losses during the last three years and have also faced bank defaults, they would not like to miss an opportunity which may help reduce their accumulated liabilities.

Despite efforts by the minister and the secretary of textile, Dr Waqar Masood, both the sides continued to stick to their stand.

They were keen to see that a mechanism is evolved under which export contracts of garments, hosiery, towels, bed-wear and other value-added textiles are not disturbed and are honoured in the world market.

Initially textile sector representatives sought ban on export of cotton and cotton yarn. However, owing to stiff stand taken by the representatives of spinners, they showed some flexibility and were ready to evolve a mechanism which could ensure availability of cotton yarn to domestic industry and exporters, sources said.

Cotton economy for the last 10 years had been operating on the basis of market forces after the then commerce minister, Razak Dawood, allowed duty-free import and export of textile raw material.

A number of suggestions were floated by the value-added sector, including imposition of duty on export on cotton and cotton yarn to those countries which compete with them in the world market.

Other proposals were of fixing ceiling on exports at the level of previous year or giving refinance on local sale of course yarn under 32 counts.

Similarly, it was also suggested that spinners should also be given refinance on export of fine yarn.

However, all these suggestions were turned down by spinners and as a result the meeting remained inconclusive.

Looking at the situation, the sources said the minister was left with no choice but to come up with some administrative measures.

He informed the participants of the meeting that approval would be sought from the Cabinet in Friday’s meeting to take legal action against hoarders and profiteers of cotton yarn.

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