LAHORE – The textile industry threatened the government of Pakistan with the protest and strike if timely clearance of imported cotton will not be allowed which has already reached Karachi Port.
The warning was issued by the Chairman All Pakistan Textile Mills Association (APTMA) Chairman Hamid Zaman in a discussion program of the Lahore Economic Journalist Association (LEJA) here at APTMA house on Thursday.
The LEJA President Sudhir Ch in the opening note elaborated on the objective of the Discussion Programs with the stakeholders. The Senior Vice Chairman APTMA Kamran Arshad and Vice Chairman Asad Shafi were also present on this occasion.
Zaman said that the textile industry will be forced to protest if the government will not clear the imported cotton coming to Karachi. The textile industry will fail the export target of USD 25 billion this year due to the non-availability of raw materials, mainly raw cotton, he added. He said this year textile exports will be limited to 16 or 17 billion dollars.
The textile industry imports raw cotton and after value addition exports it at four times the imported value. Thus, the government should allow exporters to import 35 percent of the export value. Still, if things are not controlled, 7 million people associated with the textile industry will be unemployed this month, he warned.
The industry has been left with 60 days for raw materials only and if timely clearance of already arrived cotton will not start from the port then by the March end industry will completely shut down. This will result in unemployment of 25 million people across the country, he added.
Further, almost 30 to 50 percent of the textile industry of Punjab, KPK and Sindh has already been completely or partially closed. The industry has so far ordered 1.7 million bales of cotton from the US, out of which 0.531 million cotton bales were dispatched from the US and 100,000 bales of them have already arrived at Karachi port with a value of more than USD 300 million. These already placed orders could not be cancelled. The government needs to instruct the commercial banks and the State Bank of Pakistan for timely clearing of the L/Cs of the cotton bales importers to avoid any export crisis.
Responding to the questions, Zaman admitted that some exporters did not bring their export amount back to Pakistan due to the instability of the exchange rate. Further, he suggested the government should take action against the black sheep hoarding dollars illegally. The APTMA will not support black sheep, he added.
Zaman further pointed out that demurrages and detention charges on imported goods have exceeded the value of the goods that foreign companies have to pay. So far, 2 billion rupees of demurrages and detention charges have been charged, which are increasing with time, and for a few days, the traders and banks will be at odds with each other.
Senior Vice Chairman Kamran Arshad said that a severe shortage of raw cotton exists in the local market as the country produced only 4.6 million cotton bales this year. He mentioned that 15 million cotton bales are required to achieve USD20 billion in exports.
Ashad Shafi said that by closing the shops early, the government exchequer would suffer a revenue loss of Rs 500 billion. He added that the fear of unemployment spread in this era of inflation due to such policies.
Pakistani currency remains stable against US dollar in the open market on February 26, 2024 (Monday).
In the open market, the US dollar was being quoted at 279.5 for buying and 282.55 for selling.
Euro currently stands at 302 for buying and 305 for selling while British Pound rate stands at 352.5 for buying, and 356 for selling.
UAE Dirham AED hovers at 76.1 whereas the Saudi Riyal saw slight increase, with new rates at 74.35.
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