FAISALABAD (February 11 2004): About $100 million worth export orders have been hit by cotton crisis and high rise in polyester staple fibre prices in the country.

Textile exporters had recently booked huge export orders for Heimtextil Frankfurt fair and were happy with the fullness of response from European buyers and were planning manufacturing and export schedule for the current fiscal year.

But they were dismayed to find, on their return from abroad, that prices of cotton yarn as well as the polyester fibre have increased substantially, wiping out their margin of profit and rendering it difficult for them to fulfil their export commitments.

The government should not feel smug over the monthly export figures, as these are reflective of export commitments made six months earlier, said Ahmed Kamal, Chairman of All Pakistan Cloth Exporters Association (Apcea).

Talking to newsmen here on Tuesday, he said that cotton crisis in the county was assuming dangerous portends and would jolt the textile sector very soon. "We have been consistently drawing the attention of the relevant quarters over the last five months without evoking positive response," he said.

The crisis was pinpointed when the cotton crop fell below expectation and it was suggested that polyester fibre being the next best substitute, import duty on it should be reduced to enable the exporters cheaper purchase of their raw material and to sustain their competitiveness in the international market.

He said that since the suggestion was not heeded, the prices of both cotton yarn and polyester fibre have been constantly rising over the last five months. The price hike has been ranging from 5-10 percent per month and the cumulative effect to date has reached 25 percent.

This unbearable escalation in raw material prices coupled with escalation in other inputs has jeopardised the momentum of growth achieved by exports in current fiscal year, Ahmed Kamal apprehended.

The Apcea chief warned that although there would be no loss to the government, the exporting units would be confronted with closure and large number of bankruptcies and bad debt, ending with unemployment, job losses, industrial unrest and investment failures.

Ahmed urged President Musharraf, Prime Minister Jamali, Finance Minister Shaukat Aziz, Commerce Minister Humayun Akhtar, Industries Minister Liaqat Jatoi and Export Promotion Bureau Chairman Tariq Akram to immediately intervene and save the exporters from huge losses as well as export trade from crisis.

Courtesy Business Recorder