KARACHI, Jan 25: The sudden increase of Rs2 per kg in prices of local polyester staple fibre (PSF) will further put value-added textiles at disadvantage in the world market where Pakistani products are already facing tough competition from China, India and Bangladesh.

“Taking advantage of petroleum price increase, the local PSF producers have increased the price by Rs2 per kg on Monday,” a leading dealer in man-made fibre told Dawn.

“This increase in prices of polyester staple fibre has been made despite the fact that new raw materials of PSF and PTA/MEG at an enhanced price have yet to arrive or imported into the country,” he said, adding that the increase seems to be an interim and there is a possibility of further hike to bring in the entire effect of POL prices on board.

Usually prices of PSF were revised in the first week of every month by the local PSF manufacturers, but a sudden change in their policy of announcing price increase of this vital raw material for the spinning industry was surprising, another dealer said.

Pakistan Knitwear and Sweater Exporters Association Chairman Muhammad Kamran Chandna said that this sudden change in prices would disturb export contracts made much earlier. He said the exporters of P/C yarn and P/C fabrics as well as made-ups, who negotiated rates with buyers on the basis of cost of raw materials, would face huge financial losses.

He said the large industrial groups involved in spinning had started importing PSF after the duty on it was reduced from 20 per cent to 6.5 per cent.

The cut in duty was aimed at compensating 15 per cent to the local PTA producers to ensure that the raw material is available at a reasonable price.

Mr Chandna said the local PSF industry even after enjoying a 6.5 per cent protection was resorting to such hikes which were damaging to the textile industry as a whole. Due to this protection, the PSF industry, which mainly depends on the local market and does not export, gets higher price for the product at around $1.40 per kg as compared to the international price of $1.10 on fob basis for the January shipment.