KARACHI: Exporters of value-added textile goods said on Monday skyrocketing prices of cotton yarn will have a direct bearing on exports, which have been falling despite all-out efforts to reduce the yawning trade gap.

The Pakistan Apparel Forum (PAF) — a representative body of 12 value-added sectors — noted that during the July-Sept quarter, cotton yarn exports stood at 123,346 tonnes having a value of $320,942 whereas in the same period last year exports stood at 107,122 tonnes having a value of $306,958.

“This clearly shows that during first quarter of this year cotton yarn exports rose by 15.15 per cent in quantity term and 4.56pc in dollar term. If this trend is not checked, it will hurt country’s exports, PAF said.

The forum maintains that the disparity created by allowing 4pc drawback on export of yarn has rendered the value-added textile sector at a disadvantageous position against competitors in the world market.

It would have been in the interest of country’s exports if the government allowed indirect incentive on exports by allowing 4pc Duty Drawback on Taxes (DDT) on local sale of cotton yarn. But allowing direct incentive is hurting the exports of value-added sector as our competitors are getting cotton yarn cheaper by 4pc, the forum said.

Published in Dawn, November 21st, 2017