Ex­pected reg­u­la­tory duty stirs polyester yarn busi­ness

Pakistan Observer - - ECONOMY WATCH -

AMAN­UL­LAH KHAN KARACHI—Cen­tral Chair­man of Pak­istan Yarn Mer­chants As­so­ci­a­tion Muham­mad Us­man, while giv­ing some sug­ges­tions to re­solve the con­flict over im­po­si­tion of reg­u­la­tory duty on polyester fil­a­ment yarn, ad­vised the gov­ern­ment that fab­ric im­ports from any part of the world should be al­lowed un­der le­gal chan­nel of im­port which in­cludes Let­ter of Credit (LC) or Doc­u­ments Against Pay­ments (DP) whereas the pay­ments via bank­ing chan­nels can to save the lo­cal down­stream in­dus­try. He fur­ther asked the gov­ern­ment to put im­port of fab­ric from Dubai on neg­a­tive list as there no weav­ing/ knit­ting fac­to­ries ex­ist in Dubai while the In­dian ori­gin fab­ric was sim­ply be­ing routed thru Dubai, re­sult­ing in caus­ing se­vere losses to lo­cal in­dus­tries.

Seek­ing gov­ern­ment’s at­ten­tion, Chair­man PYMA pointed out that the lo­cal man­u­fac­tur­ers of Polyester Fil­a­ment Yarn can only meet the needs of lo­cal down­stream in­dus­try to the ex­tent of about 25 per­cent whereas the rest of 75 per­cent re­quire­ment is met through im­ported yarn. De­spite the fact that in­ves­ti­ga­tion was cur­rently un­der­way by Na­tional Tar­iff Com­mis­sion to re­view Anti-Dump­ing Duty, Some man­u­fac­tur­ers in­clud­ing Ga­tron and Ru­pali were lob­by­ing very hard to en­sure im­po­si­tion of reg­u­la­tory duty, which would re­sult in bring­ing the weav­ing and knit­ting in­dus­try on the verge of com­plete col­lapse, he said, adding that th­ese at­tempts by lo­cal man­u­fac­tur­ers would put the en­tire weav­ing and knit­ting in­dus­try in grave sit­u­a­tion by in­creas­ing the cost of yarn, thus mak­ing the en­tire down­stream in­dus­try un­com­pet­i­tive.

Muham­mad Us­man warned that re­sults would be dis­as­trous for the Ex­ports which are al­ready suf­fer­ing on ac­count of high energy costs. He said that few lo­cal man­u­fac­tur­ers were at­tempt­ing to mo­nop­o­lize in or­der to gain short term ben­e­fits at the ex­pense of huge large down­stream sec­tor which em­ploys mil­lions of peo­ple and is the back bone of econ­omy. He fur­ther pointed out that an anti-dump­ing duty of 18 per­cent was im­posed on im­ported fil­a­ment yarn from Thai­land, Malaysia, Korea and In­done­sia in 2005 and at that point in time, a to­tal of 17 lo­cal yarn man­u­fac­tur­ers were op­er­at­ing whereas this raw ma­te­rial was not be­ing im­ported from China. De­spite im­prov­ing the sit­u­a­tion, this mea­sure proved to be coun­ter­pro­duc­tive as dur­ing the last over 8 years since the im­po­si­tion of Anti-Dump­ing duty, the num­ber of lo­cal man­u­fac­tur­ers has re­duced to just four units while the mar­ket share has also dras­ti­cally de­scended, he added.

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