04 April 2004	Sunday	13 Safar 1425

FAISALABAD, April 3: Textile raw material prices in the local market have surged by 20-25 per cent in cotton yarn varieties and nearly 20 per cent in polyester cotton over the last six months , making Pakistan's exports uncompetitive in the world market.

In a statement here on Saturday, Rana Javed Akhtar, senior vice-chairman, and Sheikh Muhammad Yousaf, vice-chairman, of the All Pakistan Cloth Exporters Association (APCEA), said that average price of 20s cotton yarn was Rs507 per bundle in September 2003, which jumped to Rs607 per bundle in March 2004, registering an increase of 20 per cent. The price of 22s cotton yarn in September 2003 was on average Rs517 per bundle, which jumped to Rs645 in March 2004, showing a rise of 25 per cent.

The average prevailing market price of 26s cotton yarn was Rs562 per bundle in September 2003, which has gone up to Rs760 in March 2004, showing a hike of 32 per cent. Similarly, the price of polyester cotton yarn 38/1 in September was Rs67 per kg, which has jumped up to Rs85 per kg in March, registering a rise of 25 per cent.

They further said that this substantial rise in process of raw material seen on the basis of the prices of raw cotton was unjustified as the average prices of raw cotton in May 2004 ranged between Rs2,600 and Rs2,800 per maund. The prices of raw cotton in fact have gone down from Rs3,600 per maund in October 2003 to Rs2,600 per maund in March 2004, a steep fall of 33 per cent.

They said that the only explanation for exorbitant price hike ascribed to unrestricted export of cotton yarn, which in turn also pushed the domestic prices of alternate raw material, polyester cotton blended yarn. They said that the official statistics indicated that on an average 19 million kg extra quantity of cotton yarn was being exported as compared to the last year.

Consequent upon the rise in raw material prices the down stream textile sectors are facing difficulties. Nearly 10,000 powerlooms are reported to have closed down in the country. The sizing industry has also threatened that thousands of workers and labourers engaged in the sizing sector would be rendered jobless, contributing to further increase in unemployment figures.

They said that textile exporters were the end users and most hit of the whole process. The exporters are facing it difficult to sustain themselves in international market due to high cost of raw material. The exporters are particularly worried that this being the last year of textile quota regime and the whole quota edifice is phasing out by end-December how they would be able to survive in the face of fierce competition in a free-for-all new world trade order.

They said: "All neighbouring countries who are our competitors in the international market are providing relief to their exporters by cutting down the cost of production. However, in Pakistan the exporters are facing extraordinary hike in production cost.

The exporters demanded that the export of cotton yarn from the country should be totally banned in order to bring the prices of raw material in domestic market at reasonable level to sustain the down dream industries and exports of textile.

They also called for immediate action by the government as huge damage had already been done to the textile sector.