KARACHI, Nov 6: Spinners have decided to slow down their raw cotton purchases to ensure that prices are not pushed due to their panic-buying in the domestic market.
In an emergent meeting called in Lahore on Monday, the All-Pakistan Textile Association (Apta) members deliberated at length raw material situation prevailing in the country for textile industry.
Though members expressed concern over high prices of raw cotton and polyester fibre, they were unanimous that current cotton crop size is not bad and local lint cotton is almost at parity with imported cotton.
Consequently, it was unanimously resolved that spinners should slow down their purchases and only meet their current and immediate demand.
It had been the practice of textile industry to purchase cotton stocks during the first three months of each cotton season (October to December), and this results in price-hike.
The large industrial groups, having huge bank finance facilities, are the main cause of surging prices at the start of each cotton season, analysts said.
The participants of the meeting lauded the government for allowing three per cent subsidy in mark-up rate to spinning industry.
It was, however, pointed out that benefits of the scheme as per its current state of mechanism are not available to the entire spinning industry.
The Apta urged the government to tailor the three per cent subsidy in such a way so that all spinning units throughout the country could benefit from it, regardless of any default, swap or rescheduling of loans.
The spinners also demanded that loans from leasing companies should also be included in the ambit of the scheme.
It was also demanded of the government to allow imports of cotton of all categories and qualities from India through Wagha border and duty-free import of polyester should also be allowed without any further delay as the industry is presently paying high cost for lint cotton and polyester fibre.
There was strong argument from members that current lint cotton rates (ranging between Rs3200 and 3300 per maund) and polyester fibre rate that has recently increased to Rs97 per kg, may further increase owing to closure of some large polyester fibre manufacturing units in the country.
In order to off-set the bad affects of these developments, the Apta members demanded free import of polyester fibre and lint cotton import from India through Wagha border.
