The spinning sector in Pakistan is the backbone of the textile value chain. It has faced the brunt of the high cost of doing business in the last few years, which has made it unviable. Today the spinning industry is incurring heavy losses by selling yarn below its cost due to poor demand from domestic consumers.
Pakistan’s total production of yarn in the year 2016-17 was 3,428,730 tons whereas cotton yarn exported in the same period was 4,55,345 tons i.e. only 13.28 per cent of the total production of the year. Similarly in 2015-16 total production of cotton yarn was 3,405,559 tons whereas only 12.44 per cent or 423,624 tons was exported. Thus about 87 per cent of the cotton yarn produced in the country is available for the local market whereas the domestic downstream industry consumes only about 70 per cent of the total production of yarn.
Since production of yarn is substantially more than local consumption, the industry feels yarn exports must be encouraged at all costs, otherwise it will result in permanent massive closure of mills and resultant unemployment.
Owners of Pakistan’s textile mills have strongly rejected the suggestion to stop the four per cent rebate on the export of yarn.