ISSUES IN TEXTILE INDUSTRY
Exports may not reach the traditional mark of $5 billion this year
Jan-14 - 20, 2002
The textile industry, which is the mainstay of Pakistan's economy, is passing through difficult times due to uncertainty prevailing in the buyers market in the aftermath of September 11 incident especially in the United States.
Nadeem Maqbool, Chairman, All Pakistan Textile Mills Association (APTMA) told PAGE that inventories of the textile mills are piling up due to lack of fresh export orders. So far the industry was engaged in meeting the export orders already in the pipeline of the last year. There is a marked decline in fresh orders, which is the main cause of concern for the textile sector. Decline in the knitwear, yarn and gray cloth is noticeable and calls for immediate solution, he said.
Commenting on the EU package of incentives given to Pakistan, he said it would certainly result in enhancing exports from Pakistan. However it would be too early to comment on its total impact on our exports.
He appreciated that EU has waived duty across the board on Pakistan products except 5 items including yarn, Gray cloth, leather and leather products etc. Since these items are already much in demand duty will remain on these items, that however rest of the items and categories have been exempted from duty. Similarly 15 per cent increase in quota and enhanced accessibility will also help boosting the exports in the long run.
He however said that the textile industry is eagerly awaiting the incentive package from United States, which is the major buyer of Pakistani textiles. He expressed the hope that as a result of negotiations going on between Pakistan and the United States, a comprehensive package will certainly be announced by the United States to offset the adverse impact the industry is facing after September 11.
Nadeem Maqbool said that textile industry was well equipped to meet the future challenges. Under the on going balancing-modernization-replacement (BMR) process the textile industry has spent $500-600 million during last two years.
The APTMA chairman said that use of man-made fiber is increasing tremendously all over the world, but unfortunately it did not take place in Pakistan due to undue protection being given to 5 polyester fiber producing units. He said that even after payment of 25 per cent duty, the imported polyester fiber is cheaper than the locally produced polyester fiber. He strongly recommended that any sort of favour or consideration go against the principle of economics. If Pakistan textile industry was allowed to increase use of polyester fiber at least by 50 per cent, the industry will not only produce the export surplus but also certainly earn the precious foreign exchange for the country.
He said that nature was kind enough to Pakistan which is self-sufficient and producing enough cotton to meet the requirement of the industry. He however regretted that the involvement of the public sector in the cotton sector on the basis of help out the growers is one of the major causes of disturbance in smooth running of the textile affairs in Pakistan.
He said that the government for procurement of cotton has authorized Trading Corporation of Pakistan. He said that TCP lifting cotton at the support price but selling it in the export market at a much cheaper price. By doing this TCP is strengthening the hands of our competitors consequently adversely affecting the export-oriented units in Pakistan. He said that textile sector is willing to buy the entire lot of cotton stock held by TCP at international price provided TCP floats tenders for the sale of cotton. He strongly recommended that as far as fixation of cotton price is concerned, let the market forces prevail to determine the prices. He disagreed that the involvement of TCP helps the growers for a better return. He said that entire benefit never goes to the growers, a considerable portion of benefits given by the government goes into the pocket of the middlemen. He was of the view that if the involvement of the public sector was eliminated in the cotton affairs, the textile industry was capable enough to fulfil the needs of the growers in the country.
Meanwhile, in order to ascertain the actual impact on the textile and other exporting sector, the economic division of the US mission in Pakistan is conducting a survey. It is however feared that the way our industry is being run and in the absence of a proper data base actual impact on our external trade may not be possible.
Keeping in view the difficulties faced by the United States in granting concessions to Pakistan in textiles exports, both countries have started deliberations on a revised trade package in Washington.
Following discussion between Commerce Minister Abdul Razak Dawood and Pakistan's envoy to the US, Dr. Maleeha Lodhi, Secretary Commerce Mirza Qamar Beg air-dashed to Washington recently.
Pakistan was now asking the United States that the trade package be announced as early as possible so that Pakistan's textile export could pick up momentum.
The long awaited revised trade package has been prepared in consultation with Export Promotion Bureau and textile entrepreneurs, who had visited the US with the commerce minister.
Textile sector in Pakistan is pinning hopes to have a good trade package to accelerate pace of exports from Pakistan, currently on the decline.