Govt urged to regulate cotton, yarn exports
KARACHI: The value-added textile sector has urged the government to immediately start regulating cotton and cotton yarn exports to safeguard raw material supply to the local industry in the light of Indian decision to ban raw cotton exports.
The leaders of different value-added textile bodies fear that Indian decision is going to create raw cotton shortage in the world market and may result in a price-hike.
They apprehend that unbridled export of cotton and cotton yarn from Pakistan would put local textile industry under crisis due to raw material shortage.
Jawed Bilwani, chairman, Pakistan Apparel Forum (PAF), said that Indian move is purely based on its national interests because after meeting export target the government stepped in and stopped further exports to safeguard the interests of its value-added textile industry.
He further said that India, being the second largest cotton producer of the world, is expecting crop size of 34.5 million bales for the year 2011-12, thereby giving huge exportable surplus of around 10 million bales.
The Indian government took the decision of imposing ban because exports of raw cotton, Mr Bilwani said, overshot government estimates at 8.5 million bales.
The Indian move had been fast which included cancellation of all those registered export contracts for ensuring smooth supply of raw material to their local textile industry, he added.
Naqi Bari, vice chairman, Pakistan Bedwear Exporters Association (PBEA), urged the government to immediately start regulating raw cotton and cotton yarn exports to ensure raw material availability to local value-added textile industry. He further said that the world had entered into an era where ‘war for raw material’ has began and only those nations would succeed who could protect their industry by ensuring smooth supply of any kind of raw material.
Citing an example, Mr Bari said last year Indian government indirectly influenced raw cotton exports to Pakistan and managed to cancel registered contracts of around two million bales which chocked raw material supply to our spinning industry.
He further stated that by regulating exports of cotton and yarn, the government may be able to keep an eye on outflow of raw material and in case exports exceed certain quantity, it would be easy to impose ban to safeguard local industry’s interests.
Rafiq Godial, chairman, Pakistan Knitwear and Sweater Exporters Association, said that the biggest drawback our country faces is that our regulators and institutions mostly fail to take prompt decisions in the larger interest of the country.
He apprehended that MFN status to India and Safta would expose industry to threats because our regulators are too weak to face the situation. Therefore, if the government fails to urgently start regulating raw cotton and yarn exports, the emerging global market situation would deprive our value-added industry from much needed raw material, Mr Godial stated.