KARACHI, Jan 14: The exporters have urged the State Bank to remove the cap of $3 per sq metre on grey and bleached fabric for availing export finance facility.

In support of their demand, the exporters argued that this cap of $3 per metre is not going to encourage export of fine and higher count fabrics. On the contrary, still a sizable quantity is being imported to meet domestic industry demand, they added.

At present production of fine count fabrics, like 60, 80 and 100 counts, is in low quantity, and in order to meet the local requirement an equal quantity is being imported. There is an improvement in export of grey and bleached fabrics, but the cap of $3 per metre is only damaging interest of the country, they added.

Pakistan Cloth Merchants’ Association (PCMA) chairman Ahmed Chinoy told Dawn that as a result of this condition, powerlooms are being closed down in a large number. Such restrictions are only imposed when there is a shortage of raw material i.e. yarn in the domestic market.

Since there is insufficient production of fine fabrics to meet the domestic demand and similarly there is no shortage of course count yarn, the imposing cap for availing export finance could damage the export of grey and bleached fabrics.

According to the figures up to June 30, 2002, total export of fabric stood at $1.6 billion, which contributed 27 per cent of the total textile exports and 18 per cent of overall exports.

Mr Chinoy said most of fabric exports make their way to non-quota countries such as African, Middle East and Far East.

He further said there had been significant increase in export of fabric during 2001-02, over the previous year, particularly in term of dollar value which stood higher by 10 per cent.