KARACHI (March 02 2004): The spinners and representatives of value-added textile associations are flexing their muscles for a possible show down at a meeting here on March 9 on the question of putting restrictions on the export of cotton yarn.

The meeting has been called by the Export Promotion Bureau (EPB) following a representation sent to President Pervez Musharraf in December last year by the value-added textile associations, requesting that the export of yarn be put under a restrictive regime without undermining its potential and growth.

EPB Chairman Tariq Ikram will chair the meeting.

All Pakistan Textile Mills Association (Aptma) Chairman Waqar Monnoo, when asked to comment on the issue, said: "In the first place, the EPB should not have called the meeting at all. It is against free trade. The EPB's main job is to promote exports and not providing "protection and guarantees " to some sectors at the cost of others," he said.

Firmly expressing, he said that his views were based on ground realities. The value-added sector's only concern was "reduction in price," which was uncalled for, he said.

Monnoo said they wanted quality but at cheaper rates, which was incomprehensible and added: "We produce high quality yarn, which is in excess of the local demand. This is exported on the best available prices. The importer has to pay the price of yarn plus freight, which the local users do not have to pay," he said.

The Aptma Chairman regretted the tendency of looking for subsidy by the value-added sector in Pakistan, and said they should learn to live with the realities of time, particularly in the wake of World Trade Organisation (WTO) demands and pay more attention towards improving their efficiency and quality of products.

The users of yarn should not only match the price offered by foreign buyers, but also be fair in their dealings, he said, and added they booked orders but kept on waiting for the right opportunity.

He said in case of price fluctuations to their disadvantage, they did not honour their commitments.

"Whereas foreign buyers open letters of credit (LCs), which binds them in honouring their commitments, but the local users are not inclined towards opening the LCs, he said.

Monnoo said the value-added textile associations would also be holding a meeting here on March 6 to evolve and prepare their own strategy for the meeting on March 9.

One of the suggestions put forth by the value-added sector was to tax the yarn exports as a normal business and, therefore, remove it from export finance regime with motivational tariffs to local value added sectors, he said.

The Aptma Chairman said he believed that these measures would result in the increase in export price and would increase the cost of the raw materials for the importing countries, thus putting them at a fair competition with Pakistan.

The present local Pakistani market could absorb the production to a very large extent, he added.

"On the other hand, the consumers of Pakistani yarn, when finding it difficult to take advantage of our goods in their own lands, will have to locate their facilities in Pakistan, (it puts no restrictions on the foreign investment in repatriation of investment and resulting profits).

"They think that their request is in line with the policies being adopted by all the developed countries and major exporting nations so that their "value-added products" are exported and the "necessary raw materials" are available to their local manufacturers at an advantageous price," he said.

Courtesy Business Recorder