Exporters also requested that the leadership open imports from India in light of the government’s approval of duty-free imports of cotton yarn.
The cabinet’s Economic Coordination Committee (ECC) removed customs duties on cotton yarn imports until June 30, 2021 on Wednesday.
They’ve also asked the government to keep the incentives going until the country meets its annual cotton production target.
Senior Vice Chairman Hanif Lakhany of the Pakistan Yarn Merchants Association (PYMA) called for the abolition of additional customs and regulatory duties on synthetic yarn in a statement released on Thursday to combat the effect of the Covid-19 pandemic and steer development activities.
Pakistan Apparel Forum Chairman Jawed Bilwani said that the value-added textile export sector had been requesting duty-free import of cotton yarn since October 2020.
The belated decision would provide only partial relief in view of traffic congestion on sea route, he said, adding that shipments were taking over two months to reach Pakistan’s ports.
“Therefore, we request the government to allow duty-free import of cotton yarn until the country achieves its cotton production target of 10.5 million bales.”
To resolve the cotton yarn crisis, the leadership should also place a ban on export of cotton yarn from Pakistan or slap 10% duty, he said.
He also called on the government to initiate necessary steps and measures to safely import cotton yarn from the Central Asian Republics through the land route by utilising the transit trade agreements signed with regional countries.
He lamented that trade through the sea route was consuming longer than usual time due to shortage of containers and vessels.
“Textile exporters request the government to take notice of hoarding of cotton yarn and cartelisation by the stakeholders concerned in line with the Price Control and Prevention of Profiteering and Hoarding Act 1977 and the Competition Act of Pakistan 2010,” he said.
According to the Price Control and Prevention of Profiteering and Hoarding Act 1977, cotton yarn was included in the schedule of essential commodities alongside sugar, wheat and edible oil, he said.
Therefore, the government must move against spinning mills and yarn traders involved in creating a monopoly, abusive dominance for exorbitant pricing and hoarding, and arrest the culprits by conducting raids.
He also called for conducting a forensic audit, which would prove that the yarn crisis was a bigger fraud compared to the sugar crisis.
“It has been learnt that 2 million cotton bales have been sold without invoices or payment of sales tax in the domestic market,” he said.
Farhan Ashrafi, Convener of the FPCCI Central Standing Committee on Yarn Trading, praised the ECC’s decision, but believes that additional customs and regulatory duties on synthetic yarn should also be eliminated to help the textile industry.
