As Pakistan struggles to boost depleting Foreign exchange reserves, the textile owners threatened the government of staging a protest due to the delay in the clearance of imported cotton containers at Karachi port.
All Pakistan Textile Mills Association (APTMA) Chairman Hamid Zaman said: “The textile industry will be forced to protest if the government doesn’t clear the imported cotton coming to Karachi.”
He said during a seminar hosted by the Lahore Economic Journalist Association that the shortage of raw materials, particularly raw cotton, would prevent the textile industry from reaching its $25 billion export goal for the current year.
“This year, textile exports will be limited to $16-17 billion,” he predicted.
After providing value, the textile sector exports produced cotton for four times its import price. Government should therefore allow importers to bring home 35% of export value.
However, the head of the APTMA has warned that seven million people employed in the industry will be unemployed in January if things are not under control.
“The industry was left with 60 days’ of raw materials only and if timely clearance of already arrived cotton will not start from the port, textiles will completely shut down. This will result in unemployment of 25 million people across the country,” he warned.
According to Zaman, the textile industries of Punjab, Khyber Pakhtunkhwa, and Sindh have already closed entirely or in parts.
“The textile industry has so far ordered 1.7 million bales of cotton from the US, out of which 0.531 million cotton bales have been dispatched while 100,000 bales have already arrived at Karachi port with a value of more than $300 million.”
The head of the APTMA appealed to the government to direct commercial banks and the State Bank of Pakistan to ensure that letters of credit are provided promptly for cotton importers in order to prevent any export crises.
In response to a query, Zaman acknowledged that some exporters were unable to remit their export proceeds to Pakistan because of the unstable exchange rate. The APTMA would support the effort, and he further encouraged the government, to take action against people who were hoarding US dollars.
“So far, Rs2 billion in demurrages and detention charges have been charged, which are increasing with time, and since last few days the traders and banks will be at odds with each other.”
According to Kamran Arshad, senior vice chairman of the APTMA, there is a major lack of raw cotton on the local market because only 4.6 million cotton bales were produced nationwide.
He stated that in order to export $20 billion worth of cotton, 15 million bales were needed.