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Calls to allow duty-free yarn import to check price hike

KARACHI: Karachi Tajir Action Committee (KTAC) on Wednesday called upon the government to allow free import of cotton yarn to check the rising prices of the commodity in local market.

"The government should immediately allow cotton yarn import without advance income tax, customs duty and other form or back loadings except sales tax. Besides, the export refinance on cotton yarn should also be discontinued immediately," said KTAC's convenor Imran Saeed Baghpatee in his statement issued here.

Despite the fact that the country had harvested good cotton crop this time which was likely to help bring down cotton prices to a record low level yet cotton yarn prices in the local market did not come down accordingly.

Baghpatee said except big cartels of spinners, all other related to the cotton industry including growers, weak spinning mills and value-added textile industry did not at all benefited from the cotton bonanza.

Consequently the prices and quality of the cotton yarn have not contributed in the export of value-added textile otherwise it would have enabled the country to earn higher foreign exchange.

KTAC convenor maintained that major portion of cotton crop had gone to a few selected mills and that ginners and speculators and had also played the same game.

The spinners were keeping their eyes on cotton stock lying with TCP and in order to purchase these stocks at a very low prices they have raised the cotton price in the local market at a high level and that even weak spinning mills could not purchase these stocks, he alleged.

For the last few weeks, he said, the prices of cotton yarn have gone back to 1998 level when there was a shortage of raw cotton because of bad crop.

Surprisingly, he said neither the government nor the Monopoly Commission have taken any steps to keep sanity in the market whereas in neighbouring country. In India the Textile Ministry has made a rule that no textile mill purchase raw cotton for more than two weeks of its requirements.

He said, in this way, the prices of raw material remain stable and uniform, and all the spinning mills of the country have an equal opportunity to purchase their requirements on reasonable rates. APP