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Exporters in Pakistan face yarn shortage, wary of booking orders

At a time when international buyers are planning to place orders for Christmas, the apparel industry in Pakistan is facing severe shortage of cotton yarn, says The Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA). The local garment industry is not capable of entertaining international buyers due to the price factor and especially owing to artificial shortage of cotton yarn created by the spinning as well as ginning industry, which is holding stock in the hope of further hike in rates, points out PRGMEA.

Over burdened by more than 11 per cent taxes and utility cost, the apparel industry demands at least 15 per cent special support to stay in international export market otherwise all current business will be shifted to other countries. The apparel export sector is under severe pressure due to severe competition from countries like Bangladesh, Vietnam and Cambodia. The current cotton scenario has compelled garment manufactures to quote downward because of non-availability of cotton yarn in domestic market as mills as reluctance to quote despite the fact that PRGMEA is ready to purchase yarn at prevailing high market prices.

Spinning mills have been holding stocks on the prediction that prices will go up amidst high additional regulatory duty on import of cotton yarn. PRGMEA says garment exporters are nervous about making shipments on time due to artificial scarcity of raw material that is forcing buyers to go to other competing countries offering lower rates. This would gradually lead to the collapse of the industry in the country. The industry demands immediate removal of regulatory duty, custom duty and other taxes on import of yarn from all countries.

 
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