During a meeting with the spinning sector representatives, held last
week, the garment producers pulled back their earlier demand on higher
regulatory duty imposed on yarn exports and now want only five percent
duty on these exports. However, the representatives of spinning sector
strongly opposed the regulatory duty on yarn exports, mentioning it as
an impractical move. .
The regulatory duty cannot be imposed on yarn exported to China as it
is forbidden under the free trade agreement, signed between the two
countries, said Akber Sheikh, former Chairman, All Pakistan Textile
Mills Association (APTMA), Punjab Zone. The country exports around 60
to 70 percent yarn to China. .
As the rates of yarn are linked with that of cotton, it has become
difficult to control yarn rates, said Ejaz Gohar, Chairman APTMA,
Punjab. For instance, prices of yarn increased from Rs 760 per 10
pounds in June 2009 to Rs 1,260 per 10 pounds in April 2010 due to the
increase in rates of cotton from Rs 3,350 per maund to over Rs 6,700
per maund, he added. .
However, the rise in yarn prices is far less when compared to the hike
in the rates of cotton. The spinners have stopped importing cotton from
international markets following the quota imposition on yarn, informed
Gohar. Moreover, the farmers are also against the imposition of yarn
quota due to fear of lower consumption of cotton by local spinners. .
Also, the farmers support free market economy as it has helped them in
the past to receive global rates on their yield. They also support free
export and import of yarn and seek free export and import of cotton.