Textile industry demands clearance of raw material stopped on coronavirus threat

KARACHI: Textile industry has demanded the government authorities of early clearance of raw material consignments that are stuck up due to measures taken for prevention of coronavirus.

Zubair Motiwala, Patron of SITE Association of Industry, in a statement on Tuesday appealed the government to allow early clearance of imports consignments containing dyes and chemicals, from China.

He said that Pakistan’s imports from China are of $12 billion and mostly comprise of dyes and chemicals which are basic raw material for textile sector – the biggest foreign exchange earning sector in Pakistan.

Motiwala said that It is a known fact that prices of raw material area increasing due to consignments stuck up at Chinese ports and other alternative suppliers such as Korea, Taiwan and India have now either stopped supplying or quoting 30 to 35 pc higher prices.

Members are complaining that it is becoming difficult to continue production activities due to shortage of raw material, while prices in the local market have gone up by 50-100 percent.

He further added that in such scenario, opportunity of increasing exports has now become the question of survival for local textile industries.

Everyone is talking about increasing exports from the country, but the fact is that production cannot be undertaken in the absence of raw material. Value-added textile sector requires ample quantity of dyes and chemicals to complete processing & finishing of fabric.

It is obvious that no one keeps the inventory for more than 1 or 2 months due to cash flow constraints as large amount of exporters are stuck up in sales tax refunds.

Also every item doesn’t utilize simultaneously and sometime, one item is required and some other item available in stock is not needed.

“Therefore, it is feared that exports, instead of increasing with the kind of advantage, it might be the other way round as it is in common knowledge that orders are based on season to season at least for six months in advance and if this price hike continues and consignments are not timely cleared, production would suffer and industries would not be able to complete their orders on time and as per commitment,” Motiwala remarked.

He requested Prime Minister, Finance Minister and Commerce Minister to foresee this situation and take urgent measures, as import consignments are lying on Chinese ports and Pakistan Embassy and Consulate in China be directed to work in this regard.

If the situation prevails, other countries would increase raw material prices further. The govt. should immediately withdraw all the levies and front loading with immediate effect so that there should be minimum burden on cost escalation on the products which is being sold earlier to this crisis.

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