KARACHI, Dec 2: Exporters have asked the State Bank to put a cap on export refinance rates to enable them to face the quota-free market challenges by staying viable and competitive.

"We are already overburdened with high cost of utilities and other inputs, and if our cost of finance also goes higher we would not be able to stand in the quota-free market against our competitors," asserted Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Chairman Dawood Usman Jakhura.

Commenting on the 0.5 per cent increase in refinance rates, the PRGMEA chief said that there had been a consistent fall in prices of textile products in the world market ahead of the quota-free market and the exporters were already confronting with the situation to protect their market share.

He says the issue of Generalized System of Preference (GSP) and duty concessions allowed under this scheme by the European Union still stands unresolved and could be a crippling blow to country's exports.

"Therefore, any increase in domestic rates of finance or other inputs would overburden the cost of production, making it impossible for our exports to face WTO challenges in the free-market era."

He said that already prices of utilities were on the higher side in Pakistan compared to neighbouring countries and any further increase in export refinance would increase the cost of production, rendering Pakistani products un competitive in the world market.

Mr Jakhura appealed to the SBP governor to cap the refinance rate for the time being in order to help exporters face the challenges of WTO. He hoped the SPB governor would consider the request favourably.

Pakistan Bedwear Exporters Association (PBEA) Chairman Shabir Ahmed said that a 13.1 per cent anti-dumping duty on bedlinen exports from Pakistan to EU-member states and a 12 per cent customs duty after withdrawal of concessions allowed by the EU under the GSP would completely wipe out country's exporters from the European market.

He said the government should provide facilities to the exporters so that they could protect their markets held by them for many years. He said other countries were making all-out efforts to protest their markets by ensuring that their exporters stayed competitive in the free-market era.

Mr Ahmed said polyester prices had increased by Rs3 per kg in the domestic market whereas world polyester prices in the past seven days were mixed, and in India they remained unchanged. Similarly, polyester prices in China also went down during the last seven days.