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Cotton yarn price

hike abroad pave way for

Pak exporters

RECORDER REPORT

KARACHI: The cotton yarn prices have gone high in European market paving way for the Pakistani exporters to earn a wide margin of profit by exporting maximum quantity.

The yarn exporters said that the recent price hike in raw cotton, had further added in the yarn prices. In the European market, yarn has been on rise for a couple of months despite the recession in the cotton prices.

"The US cotton succeeded to attract more money in the recent weeks which affected the whole European market and the yarn prices increased," an exporter said.

However, the yarn exporters said that the Pakistan exports bulk of its yarn to Far East.

"The value-added sector which exports most of its product to Europe, is in a good position to get benefit of the recent yarn hike. The domestic yarn market is relatively lower than the world market," yarn exporters commented.

The yarn prices in Far East is still lower than the European market.

"The reason is huge import of cheap yarn from China which kept the Far Eastern market lower than the expectation of the market experts. The situation may change in the next couple of weeks," spinners in Karachi said.

This was also noticed that the bulk of yarn being exported is of 20 counts for which the State Bank had been providing export financing at a much cheaper rates under the Export Refinancing Scheme.

The financing facility came to an end by the end of 1999, but the export under the scheme is still continue.

The local valued-added textile sector has been critical to the spinners that the yarn prices were not brought to the "true level" as the cotton had touched the 15 year low in the domestic market.

"Despite low yarn prices in the Far East, Pakistan's 20-counts yarn is in demand as the product contains great margin of profit in it. The same product is sold out by the Far Eastern countries in their own market after converting it into yarn of 40 to 60 counts," an exporter said.

This is the way we are losing hundreds of millions of dollars, the exporters said.

The value-added sector has been demanding to withdraw facility of export financing on yarn of 30 and above counts.

"The bulk of the foreign exchange is coming through only two sectors Ñ yarn and fabrics. It is impossible to stop export financing of yarn", spinners said.