FAISALABAD: The value-added textile sector finds itself in distress these days because of the surging prices of yarn, which is badly hitting the exports because of better conditions of doing business in the rival countries.
Prices of cotton yarn per bag has been increased from Rs3,500 to Rs4,000 and of polyesters from Rs2,000 to Rs2,500 approximately on various counts, creating plethora of problems for the fabric traders, power-loom owners and dyeing sector.
Faisalabad is considered textile capital of Pakistan and its yarn market is the biggest in Asia.
Talking to Dawn, Haji Salamat Ali, a renowned exporter, said they had been fighting on different fronts only to save their businesses and strengthen the national economy. The value-added textile sector also provided jobs to thousands of people, he added.
He said the spinning sector had increased the prices of yarn bags manifold which was unjustified and tantamount to forced closure of the value-added sector.
“How we can compete with our rival countries globally when there will be no level playfield for us in the country,” he said, demanding that the people at the helm of affairs must look into the issue of yarn prices to save the sector.
Raza Hussain, a yarn dealer, said surging prices of electricity, gas, petrol and cotton were badly affecting the entire textile chain from spinning to value-added sectors which was neither good for the national economy nor for the local entrepreneurs.
He suggested that the government must form a regulatory body to control the prices of cotton and yarn so that the textile sector could be saved which was the mainstay of the national economy.
The prices of cotton and polyester yarn increased between Rs2,000 to Rs4,000 per bag during the last two months, Hussain deplored.
“Our business rivals from countries like India, Bangladesh and even Vietnam are capturing the international markets rapidly, taking advantage of our domestic issues,” he said, adding that the foreign buyers were also reluctant to place orders with Pakistani exporters because of the uncertainty here.
Riaz Shahid, a fabric dealer, said rates of cotton grey cloth varieties registered an increase of Rs15 to Rs25 per meter during the last two months, creating problems for the local dealers.
He said the fabric market was a good source for the exporters who would contact the local dealers in case of shortage of any fabric as the dealers had been purchasing the stock lots from the big textile units. However, he said, now such units were not selling the stocks in the local market because of surging yarn prices.
Mohammad Akram, a powerloom unit owner, said because of hike in yarn rates he could not honour his commitment with a local buyer of fabric who had placed an order for 100,000 meters grey cloth just a couple of days ago. He said the unjustified increase in yarn prices had landed him in trouble as either he would face the financial loss in case of fulfilling the contract or lose a client by pulling out of the deal.
A dyeing unit owner, who wished not to be named, said the spinning sector was exploiting the entire textile sector because of having monopoly and access to power corridors. He said the yarn prices had been increased only to fleece the buyers though the government was supporting the spinning sector and providing it electricity on fixed rates.
On the contrary, he said, the hardships of dyeing, sizing and other value-added sectors had increased manifold because of high gas rates and increase in cost of business. “The gas bill of my factory last year was about Rs200,000 which has surged to about Rs800,000 this year due to increase in rates”.
Published in Dawn, April 15th, 2019