Pakistan yarn merchants association appeal to save downstream Textile Industry

Karachi, May 23, 2016 (PPI-OT): Central Chairman of Pakistan Yarn Merchants Association (PYMA), Muhammad Usman, while Appeals Federal Finance Minister to Save the Downstream Textile Industry.

PYMA letter to Finance Minister Ishaq Dar, Chairman PYMA pointed out that the local manufacturers of Polyester Filament Yarn can only meet the needs of local downstream industry to the extent of about 25 Percent. Despite the fact that investigation of injury was currently underway by National Tariff Commission to review Anti-Dumping Duty, While Local manufacturers are lobbying very hard to impose Regulatory Duty.

Chairman PYMA Said, These attempts by the local manufacturers would put the entire weaving and knitting industry in grave situation, by increasing the cost of their basic raw material (yarn), thus making the entire downstream industry uncompetitive. Results would be disastrous for the Exports which are already suffering on account of high energy costs.

“This not so noble intentions of the few local manufacturers are self-evident. They want to create monopoly like situation to give them some short term benefits at the expense of very large downstream sector, which employs millions of people and is the back bone of our economy ”, he added.

It is pertinent to note that in 2008 NTC had imposed Anti-Dumping duties (Max 18%) on the filament yarns originating from Thailand, Malaysia, Korea and Indonesia. At that time there were about 17 local manufacturers of polyester filament yarn and there was no import of polyester yarn from China.

Despite of the fact that the Anti-Dumping duty was levied for over 8 years, the number of local manufacturers shrank into four units and their market share decreased. The long term solution for local manufacturers to modernize and upgrade their plants and enhance capacity to achieve economies of scale. RD is not the right solution.

He further asked the government to put import of fabric from Dubai on negative list as there no weaving/ knitting factories exist in Dubai, the Indian origin fabric is simply being routed thru Dubai

While giving some suggestions to resolve the conflict over imposition of Regulatory Duty on polyester filament yarn, He advised the government that fabric imports from any part of the world should be allowed under legal channel of import which includes Letter of Credit (LC) or Documents Against Payments (DP) because the goods payments via banking channels can save the local downstream industry.

Chairman PYMA further stated that, textile package was envisioned by the Government of Pakistan in 2005 in which all stakeholders agreed that in order to bring fabric trade under legal umbrella, the maximum duty on fabric should not exceed 15 percent. Hence, the duty on yarn was fixed at 7 percent but over the years, the duty on yarn has escalated to 11 percent without any reason, causing distortions and making raw material for the downstream industry more expensive. “We suggest that yarn duty should be rolled back to 9 percent to give benefits to weaving and knitting industry”, he added.

He Said that Under Chapter 54 of Polyester Filament Yarn of sub pct. heading 5402-3300 and 5402-4700 which is the basic Raw Material for our downstream TextileIndustry which should be on the positive list from India origin (allow import from India),as there is a big demand of many specialized yarn which our local manufacturer (Gatronand Rupali) are not able to produce. As a result of positive reply we will be able tocompete globally.

Seeking government’s attention, He Requested to allow the middle stage Raw Material POY from all over the world at the reduce rate of custom duty 5 Percent instead of 11 Percent to make our textile industry more competitive and can attract huge investment in this sector.

For more information, contact:
Pakistan Yarn Merchants Association
S.M Saeed Qadri
Secretary – P.Y.M.A
Ph: (+9221) 2410320
Fax: (+9221) 2424896
Business Centre, 8th Floor, Dunolly Road,
Karachi -74000