“The most significant
testimony to impeccable credentials of the ministry is the formulation
of the Textiles Policy 2009-14, which was approved by the cabinet and
is presently under implementation”, a statement of the ministry of
textile industry issued here on Saturday said. ..The statement
said while formulating the policy, the ministry consulted the entire
value-chain of the textiles sector and all the representative
associations were taken into confidence in finalizing the
recommendations. This consultative process was not restricted to policy
formulation only but in almost all difficulties faced by the industry,
the ministry has adopted an approach that depends on industry’s
involvement. From load-management of gas and electricity to handle yarn
crisis, the ministry has played a positive and active role in resolving
industry’s problems walking shoulder to shoulder with all concerned
stakeholders of the textile sector. ..It clarified that from the
point the yarn crisis erupted in early September, 2009, the ministry
has been engaged with all the stakeholders working to improve the
domestic availability of yarn as local industry that comprises a large
number of small units as well as employees nearly 80 per cent of all
workers of the textiles sector was facing widespread closure. ..Besides,
it is the downstream and value-added sector that is the mainstay of the
country’s exports, and its continuing decline seriously threatened the
overall exports performance of the country, it added. ..The
statement further said despite that the ministry believed that the best
course to follow was to let the market continue to function freely as
it had been doing so for nearly two decades. “This advice, however, was
not headed and exports of yarn recorded an unprecedented increase of
nearly 50 per cent in the first six months of the year, whereas the
unit value increased by only a paltry 25 per cent”, it remarked. It
said there were many instances when heavy exports were made to East
Asian markets at export prices significantly below the international
and local prices, at a time of an unprecedented increase in these
prices. The standing committees of national assembly and senate took
serious note of the emerging conditions in the yarn and consequent
adverse effects on the value-added sector and recommended strong
measures to curb the unbridled exports of cotton yarn. ..The
cabinet committee on textiles, which had previously met in November,
and December and urged caution on the part of the spinning industry,
was then constrained to limit the exports through a quantitative
restriction of 50 million kg per month for the period, January-June
2010, while exempting the value added yarn from this restriction. ..The
ministry kept monitoring the situation and was dismayed when in January
56 million kgs were exported against the limit of 50 million kgs. In
the meanwhile, the supply in the local market remained constrained
while prices kept rising. What was more disconcerting was the
realization that the quantities of key value-added exports were
significantly down, readymade garments 11 per cent, hosiery and
knitwear 10 per cent and cotton cloth 23 per cent. Consequently, the
ministry began to hold consultations with all the stakeholders to
improve local supplies of the yarn to save the domestic industry from
ruin. ..The following measures were accordingly adopted by the
government to correct the situation: The exports of yarn will be
restricted to 35 million kgs per month for all kinds of yarn for four
months from March 1, 2010 to June 30, 2010. Value-added yarns fetching
a price of more than or equal to $3.5 per kg will be allowed over and
above the quota to those units which are registered with the ministry
of textile as value-added exporters and within limits of their assessed
capacities as determined by the ministry of textiles. ..Exports
shall be monitored by customs on actual shipments and first-cum-first
basis and registration with Trade Development Authority of Pakistan
(TDAP) shall be dispensed with. The state bank of Pakistan SBP) will
provide exports refinance facility for import of 2 million bales of
cotton to meet the shortage of cotton during the off-season and
domestic sales of yarn by spinning mills will attract income tax at the
rate of 10 per cent from March 1, 2010 to June 30, 2010. ..The
government is committed to working for the welfare of the textile
sector as a whole. Whenever, any segment faces difficulties, the
government has come forward to ease the conditions. The textiles policy
has also extended the benefit of reduced mark-up cost to the spinning
sector, for which a sum of Rs5 billion has been allocated, the
statement concluded”


Source:Al ALam AL youm Newspaper