Protest over delayed clearance of imported cotton threatens the textile industry.
The head of the APTMA says that this year, textile exports will be limited to $16-17 billion. He reveals that the value of imported raw cotton is four times higher than that of exports. An industry player warns that 7 million people won't have jobs in January.
LAHORE: The News reported on Friday that the owners of textiles threatened the government with a protest over the delay in the clearance of imported cotton containers at the Karachi port as Pakistan struggles to replenish its diminishing reserves of foreign currency.
Hamid Zaman, the chairman of the All Pakistan Textile Mills Association (APTMA), stated: If the government does not allow imported cotton to enter Karachi, the textile industry will be forced to protest.”
During a program hosted by the Lahore Economic Journalist Association, he stated that the textile industry would not achieve its $25 billion export goal this year due to the lack of raw materials, particularly raw cotton.
He predicted that “textile exports will be limited to $16-17 billion this year.”
After adding value, the textile industry exports raw cotton at four times its import value. As a result, exporters should be able to import 35% of their export value from the government.
However, the head of the APTMA issued a warning that seven million members of the industry will lose their jobs in January if conditions are not controlled.
“The industry was left with only 60 days of raw materials, and if the port does not begin timely clearance of cotton that has already arrived, the textile industry will completely cease operations. 25 million people across the nation will be out of work as a result of this, he warned.
According to Zaman, between 30 and 50 percent of the textile industries in Sindh, Khyber Pakhtunkhwa, and Punjab had already been completely or partially shut down.
“The textile industry has ordered 1.7 million bales of cotton from the US so far,” according to the article. “Out of those 1.7 million bales, 0.531 million have been shipped, and 100,000 bales have already arrived at the Karachi port with a value of more than $300 million.”
To prevent an export crisis, the APTMA chief urged the government to instruct commercial banks and the State Bank of Pakistan to ensure that cotton importers’ letters of credit are opened promptly.
In response to a question, Zaman acknowledged that the fluctuating exchange rate prevented some exporters from returning their export earnings to Pakistan. He also promised that the APTMA would support the government’s efforts to take action against those who were hoarding the US dollar.
Zaman also said that foreign businesses had to pay more for import demurrage and detention fees than the goods were worth.
“Since the last few days, the traders and banks will be at odds,” according to the statement, “So far, Rs2 billion in demurrages and detention charges have been charged, and these charges are increasing with time.”
According to APTMA Senior Vice Chairman Kamran Arshad, the country had only produced 4.6 million cotton bales, causing a severe shortage of raw cotton on the local market.
He mentioned that $20 billion in exports required 15 million cotton bales.
