Apparel sector wants duty-free yarn import through Wagha to end raw material scarcity

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LAHORE:  The Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) on Sunday asked the government to allow import from India through Wagha border land route on zero-duty, exempting it from all types of taxes and duties, as import from Afghanistan and Central Asian States via Torkham land route would not end apparel industry’s raw material scarcity.

We appreciate PM Imran Khan for taking serious note of cotton shortage and its skyrocketing prices in the country, instructing the Ministry of Commerce to take necessary measures, including cross border trade of cotton yarn, to keep the momentum of value-added exports, said PRGMEA Central Chairman Sohail A. Sheikh and chief coordinator Ijaz Khokhar in a statement.

Sohail A. Sheikh said that the apparel sector is in trouble because of cotton shortage and its high prices in local market, as the cotton rates found no respite from an unabated spike with the industrial input trading at season’s highest rates because its depressed local production continued to widen demand and supply gap.

Ijaz Khokhar said the unavailability of cotton yarn has badly affected the value-added textile industry in the domestic market by putting millions of Dollars export orders at stake.

“Apparel sector is now reluctant to book new orders, as it is no more competitive due to record high rates of cotton yarn,” he added. He said that Adviser on Commerce, Textiles and Investment Abdul Razzaq Dawood had assured the apparel sector of allowing cotton yarn imports from India through Wagha border but now the government is considering permitting imports just from Afghanistan and Central Asian States, which would have no significant impact on cotton shortage.

Sohail A. Sheikh said that importing yarn from other countries was not only expensive but would also take one to two months to reach Pakistan. “Yarn can be available to us on time from Wagha border and fulfillment of export orders will also be possible on time in this way, he added.

Sohail Sheikh said that in order to promote the export of value-added textile industry, the government would have to take important steps to increase the production area and production of cotton. He said that it was a matter of concern that the production of cotton in Pakistan was reduced to only 5.5 million bales. The country’s textile sector consumes around 12 million bales of cotton per annum but production has fallen short of the requirement over the past one and a half decade.

With low production, the country needs to import cotton in an effort to bridge the demand-supply gap.

Furthermore, Pakistan produces short-to-medium staple cotton whereas long and extra-long staple cotton is imported for manufacturing finer yarn for its subsequent transformation into high value-added textile products.

PRGMEA Central Chairman also urged the government to impose a complete ban on export of cotton yarn up to 30 counts till the sufficient raw material is available to the industry. It will be positive for the apparel industry to convert it into value-added goods, exporting them in the international market instead of raw cotton yarn, he added.

Sohail Sheikh applauded the government’s incentives and support to the apparel exporters, who succeeded in enhancing textile exports by more than 8 percent to $8.8 billion in the seven months of the current fiscal year which should continue in future. He also pointed out that in time decision of the government to open the industrial sector played a major role in stabilizing the economy in addition to keeping the jobs intact of the millions of workers.

“Again we need to take a timely decision of allowing the duty-free imports of yarn from land route of Wagha to keep the growth pace intact amidst severe shortage of raw material.”