KARACHI
\nThe All-Pakistan Textile Mills Association (APTMA) has warned the government that the country\u2019s textile exports could fall below $1 billion a month from 2023 onwards and sought their help to save the sector from destruction.
\nIn a letter to Prime Minister Shehbaz Sharif Friday, the APTMA said, \u201cthe textile industry using less than 50% of its capacity. If corrective action is not done quickly, many jobs have already been lost, and many more will do so.\u201d
\nThe association, attributing the problems to supply chain disruptions due to floods, said they destroyed the cotton crop. They added that only 5 million bales were produced this year, whereas the industry requires 14 million bales, adding that the forex issues have shrunk cotton imports and other vital intakes necessary for exports.
\nThe letter added that the dollar shortage had also increased the cost by 20% due to delays, loss, and failures to book orders owing to the uncertain and delayed turnaround time for export orders.
\nThe currency depreciated 60% within the last year with no corresponding increase in working capital facilities, the APTMA letter noted. The millers stated that a much higher quantum of funds was stuck with the work in progress due to a 17% sales tax and devaluation of all inputs.
\nAPTMA urged the government to restore SRO 1125, zero-rating for the textile value chain, and collect sales tax on domestic sales at the point of sale. It demanded an immediate refund of all deferred sales tax, tuff, and other dues and an extension in the duty drawback claims submission date for FY21.
\nAPTMA asked, \u201ca new export sector working capital lending facility be established catering to EOU sectors at subsidised rates to tide over the current crisis.\u201d
\nThe association said export-oriented units were under enormous strain as they needed to yield funds to service debt.
\n\u201cThis will lead to massive defaults, further curtailment of capacity, and a possible banking crisis.\u201d
\nAPTMA further demanded a moratorium on capital repayment from July 1, 2022, to June 30, 2023, saying the gas\/RLNG supplied to Punjab was priced at $9 of the average consumption of mills last year.
\nThis formula irrationally excludes the new plants\/expansion made during the last two years. Gas\/RLNG supply to the Sindh export industry was supplied at $3.75\/ MMBTU (Rs840) and a quantity meeting 80% plus requirements.
\nThis was contrary to the commitment that the differential in gas\/RLNG pricing within the country would be less than $2 to keep the Punjab industry competitive.
\nThis huge differential means that the Punjab-based industry is paying for gas at $9 and electricity at Rs19.99\/kWh, while the bulk of the Sindh industry is generating their electricity at 4 cents\/kWh. Given this differential, Punjab-based industries were no longer viable and had no option but to close down, APTMA said.
\nIt sought implementation of the weighted average cost of gas while extending RCET across the country to enable new industrial units, expansions, and Punjab-based industries to compete.
\nIt also asked the government to prioritize the export industry in gas\/RLNG supply. \u201cAllow competitive tariffs to all new projects and expansions,\u201d it demanded.<\/p>\n","protected":false},"excerpt":{"rendered":"
KARACHI The All-Pakistan Textile Mills Association (APTMA) has warned the government that the country\u2019s textile exports could fall below $1 billion a month from 2023 onwards and sought their help to save the sector from destruction. In a letter to Prime Minister Shehbaz Sharif Friday, the APTMA said, \u201cthe textile industry using less than 50% […]<\/p>\n","protected":false},"author":2,"featured_media":303400,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-303373","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n