Low-priced cotton, yarn export hurts local industry

KARACHI: Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) has accused local traders of exporting cotton and cotton yarn at lower than international prices, which it says hurts local industry.
“We exported cotton yarn at $1.58 per pound and cotton at $1.14 per pound, while the price of cotton jumped to $1.92 per pound in the international market,” said Saleem Parekh, central chairman of PHMA in a letter to the President Asif Ali Zardari on Saturday.
The letter was written after President Zardari had assured All Pakistan Textile Mills Association (APTMA) that no restrictions would be imposed on cotton and cotton yarn export this year.
The National Assembly’s Standing Committee on Textile has asked authorities to allow export of cotton and cotton yarn in case they were surplus.
Parekh said that India was creating non-tariff barriers in export of cotton and cotton yarn to protect its value-added textile sector, although India’s textile exports were only 12 percent of its total exports.
Pakistan’s textile export is 57 percent of its total export, but authorities are not willing to regulate export of cotton and cotton yarn, he said.
If local traders do not export cotton yarn and instead provide it to the value-added textile sector, much higher foreign exchange could be earned, he said. “Garment manufacturers could have earned up to six dollars per pound of cotton after value addition against $1.58 per pound the cotton yarn export has yielded.” Value-added textile export constitutes 82 percent of total textile export.

(Source: http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=30926&Cat=3&dt=2/13/2011)