BISINISS WORLD NEWS

LAHORE: The All Pakistan Textile Mills Association (APTMA) has announced a countrywide strike on March 18 to protest a reduction in the yarn export quota from 50,000 to 35,000 tons per month.

The next course of action will be announced after the strike, Chairman APTMA Punjab Gohar Ejaz and senior members said at a press conference at APTMA House here on Saturday.

Gohar Ejaz said the reduction was contrary to the assurance extended by members of the Federal Cabinet to spinners at their meeting early January in the presence of the President of Pakistan.

APTMA member mills were given an understanding that the matter would not remain unsettled up to June 2010, he said, adding, all members of the association would join the strike.

"The only way out of the quagmire was the restoration of Free Trade Mechanism and an end to all restrictions on the export of yarn as per the vision of Mohtarma Benazir Bhutto, which she announced in 1994 as Prime Minister of Pakistan", he said.

While criticising the ministry, he said steps like imposition of quota and later a reduction in it could result in permanent closure of spinning units because of the absence of yarn exports orders from the outside world.

This will result in loss of foreign exchange earnings by Pakistan, he added.

He said spinning industry exports would decline if no immediate revision on quota imposition was made.

The chairman viewed," acute financial hardship is resulting into the closure of business operations besides serious consequences of government meddling in the free market mechanism were burdening the country with incapacity to honour its export commitments".

He said that the value added sector, the most inefficient, was already the beneficiary of a 20% yarn price decrease. It was reasoned that any support desired to be extended to the garment sector should not be done as a cross subsidy realized from the spinning sector, rather the government should support them directly from its own resources, he added.

"Already, the value-added sector was pampered enough by different supports like duty drawbacks, export re-finance etc.

It should learn to stand without crutches," Gohar Ejaz said.

He said there was a unanimous opinion that shortages of cotton and simultaneous yarn export embargo would not only adversely affect the spinning industry but textile exports all across the value chain would also be seriously threatened.