KARACHI: Pakistani makers of bedwear, angered by continuous increase in price of cotton, are boycotting a government-sponsored meeting being held in Islamabad on Wednesday to discuss the issue because they believe the exercise will be futile.

Shabir Ahmed, Chairman Pakistan Bedwear Exporters Association, said on Tuesday that cotton price has shot up in the local market on the back of exports to competing countries.

“We have asked the government again and again to take action but nothing has happened,” he said, adding no action has been taken on recommendations of a similar meeting held just 15 days ago. “There is no point in attending it when the outcome will be nil.”

Representatives of eight textile associations are meeting textile ministry officials to get some sort of restriction imposed on the export of raw cotton and yarn.

Ahmed said only the export of bedwear had reached $2 billion in fiscal 2006-07. “Now our exports have come down to just $1.7bn even when the rupee has depreciated so much. This is high time to make a key economic decision — whether the reliance on international financial support is helpful in the long run or export earnings from value added products.”

Industry people say the government has to make a difficult choice between pleasing politically strong growers and aggrieved industrialists.

Naseem Usman, Chairman Karachi Cotton Brokers Forum, said growers get a high price for cotton from international markets. “Indonesia, Vietnam and China all are offering much higher rates.”

The country expects to produce around 12 million bales this year, he said. “As much as one million bales will be imported and in return if the industry picks up, almost four million bales would have to be imported at a much higher cost.”

Usman said farmers have strong presence in parliament and they will fight hard to ensure that no ban is imposed on exports. “Under the World Trade Organisation (WTO), everyone is free to trade. It would be a hard way out of this crisis.”

Textile industry people argue the relatively cheap Pakistani cotton exports go on to help the country’s direct competitors and choice should be obvious. A cut in export refinance rate has also embedded sense of deprivation among the industry, which witnessed worst corporate performance in 2008-09.

Increase in energy price and cut in power supply have all gone to inflate cost of production for the industry. Slump in international demand is also giving sleepless nights to the exporters.

Interestingly, free trade rules are mooted by the industry itself. Shabir Ahmed wants complete withdrawal of anti-dumping duty imposed on import of polyester fibre from China and elsewhere.

“Four companies have a monopoly over the price of this raw material,” he said, adding “we can get polyester fibre cheap from foreign markets so why rely on these suppliers?”

He said bed sheets made of polycotton have a good market in the US and UK. It makes sense to make them cheap here for exports, he added.

However, Abdul Ghani, a spokesman for a multinational company, which makes polyester fibre, explained that the price of the product went up last year because of high crude oil prices.

“But since then polyester price has come down. It was Rs124 per kg in August 2008 and now it is selling at Rs112 per kg.” Polyester fibre is the chemically produced alternative of cotton yarn.

Wednesday, November 18, 2009
By By Saad Hasan

Source: www.thenews.com.pk