KARACHI, Nov 1: Local polyester fibre manufacturers increased on Saturday the prices of three polyester staple fibre (PSF) products by Rs3 per kg. The price hike will push up the production cost of synthetic clothing and hence make synthetic garments costlier in the local market.

Coming ahead of Eidul Fitr, the price increase in synthetic garments may prove to be the proverbial last straw on poor consumers’ back who are already braving a bout Ramazan price hike in sugar, flour, rice, vegetable ghee, mutton, beef, vegetables, fruits and what not. Synthetic garments are mostly used by the people of low income group.

Five local manufacturers, including ICI that enjoys a 10-year sovereign guarantee protection of the government, have now priced their three products at Rs70, Rs71 and Rs72 a kg for the local textile industry. Entire product of these five units — about half-a-million ton — is consumed in the local industry.

A study of industries and production ministry worked out the production cost of polyester raw material ranging between Rs37.81 and Rs43.30 per kg in the five units of synthetic fibres in Pakistan. The government has already paid more than Rs6 billion to ICI since 1998 the cost of sovereign guarantee against its investment of $130 million in infrastructure development for its PTA expansion project.

Junaid Iqbal, former vice-chairman of the All Pakistan Textile Mills Association (Aptma), said that five local PSF manufacturers had formed a cartel and increased the prices.

Local textile industry is hard pressed because of rising cotton prices. The industry was looking towards the government for getting some relief in the import tariff of PSF products.

The government on Friday decided to reduce import tariff by five per cent on two polyester staple fibre products that are used in very limited quantities in machine-made carpet sector and woollen textiles. A small quantity is also used in the domestic synthetic quilt industry in which synthetic fibre is used to substitute cotton that fill the traditional quilts.

The reason for this five per cent duty reduction — from 20 per cent to 15 per cent — on two PSF products exceeding 2.22 decitex and on combed or processed was given that it would meet a demand of the European Union. The EU was demanding market access to Pakistan for its products in response to the tariff concession offered to Pakistan textiles last year.

Former Aptma chairman Anwar Tata said that PSF products consumed in the textile industry were of less than 2.22 decitex. Those of 2.22 decitex and above are used in making synthetic yarn ropes and other products, but certainly not textiles.

A source in local machine-made carpet industry said the local industry imported in small quantities of PSF products. These are used in manufacturing floor coverings and carpets used in motor cars. He was not sure if the five per cent duty reduction would bring down prices of floor coverings and carpets being used in motor cars.

The woollen textiles sector in Pakistan is in very bad shape after woollen fabrics from Europe and the Far East countries swarmed Pakistani market following a reduction in import tariff.

Pakistani markets are now stuffed with English, Italian, German, Indonesian and Thai woollen fabrics.

The PSF consumption in domestic textiles is about 25 per cent of the total fibre consumption. There has been a convincing case to push up this ratio to at least 50 per cent. Synthetic fabrics have a big domestic market and equally a huge demand in exports. Synthetic exports exceeded $550 million in 2002-03 and market analysts are convinced that this export can be taken up to $1 billion in the next two years, and by 2010 synthetic clothing from Pakistan can fetch as much as $5 billion.