Any interference in the free market mechanism will disrupt Pakistan’s exports, warned APTMA in its latest press release.
In press release, on 15th April, Adil Bashir, Chairman APTMA warned that any distortion in policy of Free market Mechanism from cotton to Garment in textile supply chain will be a disaster for the textile exports of Pakistan. It went on to explain that Pakistan is short of cotton by approximately half of its requirements. Country produces around 7 million bales of cotton each year and consumes around 14 million bales in its 8 billion dollars spinning industry.
Pakistan’s spinning industry, according to the APTMA press release, is 3rd largest in the world after China and India, and is standing solid to meet the requirements of downstream (ie fabric and garment manufacturers). Out of total yarn produced locally(around 200,000 metric tons annually) only around 50 percent is consumed by the local value added “Garments and Home Textiles” that exports products of around US $ 9 billion. Balance 50 percent cotton is exported in form of yarn and fabric worth around US $ 5 billion.
As a new cotton season approaches in July international prices of cotton are at 90 cents delivered in Pakistan from Brazil, USA and West Africa. It is a hope for complete textile supply chain that cotton farmers are expecting to get prices at these levels after 201. Farmers will thus be encouraged and cotton plantation will get priority compared to other crops.
APTMA press release argues that “Free Market Mechanism” ensures international prices to the complete chain from cotton to dyed fabrics and that is why Pakistan sustained the biggest crop failure this year and is still on path of growth by 20 percent in exports. However this also happened because government provided Regionally Competitive Energy Tariffs (RCET) US $ 6.5 for Gas and 7.5 cents for Electricity.