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News Clips 04 April, 2014


[ Funds for textile sector mark-up support schemes ]
[ India announces big incentives for its exporters to compete Pakistan ]
[ Weavers, spinners divided on Indian yarn import ]

Funds for textile sector mark-up support schemes   [ top ]

Daily Times, April 04, 2014
KARACHI: Ministry of Textile Industry (MinTex) has released funds to make payments during current financial year 2013-14) under Export Finance Mark-Up Rate Facility and Mark up Rate Support for Textile Sector against Long Term Loans. 

A circular letter by the State Bank of Pakistan (SBP) said funds have been released for payment of 100 percent Export Finance Mark-up Rate Facility for the period September 1, 2010 to February 28, 2011 and for payment of 100 percent Mark up Rate Support for Textile Sector against Long Term Loans for the period March 1, 2011 to August 31, 2011. 

Banks/DFIs may lodge separate claims for Mark up Supports under above schemes of the government of Pakistan for the period mentioned, keeping in view the terms and conditions of each Scheme. Duly completed claims on prescribed formats may be lodged with the concerned offices of SBP-BSC (Bank) up to May 7, 2014. 

India announces big incentives for its exporters to compete Pakistan   [ top ]

Free market access to EU due to GSP Plus
The Nation, April 04, 2014
LAHORE - India has announced $10 billion subsidy for its exporters, declaring to provide rebate of up to 7.5 per cent to garment exporters following the free market access of EU countries to Pakistan due to GSP plus status. 

“The Indian central government as well as several provincial governments have announced many incentives for their textile exporters, including subsidies on input cost, relaxation in interest rate, rebate on export and cut in power tariff to compete Pakistan, which has, recently, been awarded the status of GSP Plus,” observed the APTMA Punjab chairman SM Tanvir. Addressing a press conference, here on Thursday, he said that textile industry on independent feeders is facing eight hours of electricity load shedding, resulting into one-shift closure. He apprehended that if industry is not provided with uninterrupted electricity supply, mills would be constraint to opt complete closure of their operations.

Chairman APTMA Punjab also demanded the uninterrupted gas supply to the industry in order to stop closure of mills and ultimately large-scale unemployment in the province. He has urged the govt to save Punjab textile industry without delay. He said the Punjab-based textile industry is confronted with a serious challenge of sustainability on account of energy shortage, particularly gas supply, which is not being provided with as per requirement.On the contrary, he said, the textile industry in other provinces is getting 24/7 gas supply and the widening disparity of the Punjab textile industry against other provinces is inflicting Rs72 billion per annum as an additional cost. This situation is resulting into large scale closure of textile mills in Punjab, he added. He urged the govt to ensure 24/7 uninterrupted gas supply to the Punjab based textile mills in line with other provinces so as to realize maximum benefit of market access facility from the EU. He said continuity of mills operations during the outgoing winter has yielded additional exports worth $180 million during first two months of the calendar year. He said the winter season has come to an end and summer has set in, therefore, the Punjab-based textile industry expects diversion of additional gas available from space and water heating. Chairman APTMA Punjab said that the low availability of gas supply to the Industry aggravates the situation, while such industry in other provinces is being provided gas supply 24/7 resulting in extremely low energy cost for them. A large number of units without backup of gas supply and fully dependent on PEPCO were the worst hit and needed support from the Ministry of Water & Power for full provision of electricity supply, he emphasized. 

Weavers, spinners divided on Indian yarn import   [ top ]

DAWN, April 04, 2014
FAISALABAD: The import of cheap Indian yarn in Pakistan has generated a divided response from the weaving sector and the spinning industry. While the latter appreciates its availability due to lower prices, the spinners are apprehensive and consider it a serious threat.

Owner of a leading spinning group of Faisalabad told Dawn that India expanded its capacity to hurt Pakistan economically by dumping its produce, forcing the key textile industry to crumble.

“In India, electricity is cheaper, and interest rates of banks and cost of doing business are low. There is no load-shedding of gas and electricity. How can the local spinning sector compete with India?” another businessman asked.

“If a yarn bag costs Pakistani spinners about Rs10,000, their counterparts from India are selling the same bag for Rs7,200,” he added.

Indian spinners have been dumping their duty-free yarn in Pakistan. They are also getting 2.5 per cent rebate from the Indian government. Whereas, Pakistani and even Chinese spinners have to pay 5pc duty on yarn export to India, sources in textile circles argued.

A businessman, who declined to own his comments, said, “About 25pc duty is imposed on fabrics. The All Pakistan Textile Mills Association had taken up the issue with relevant ministries but the government response is still awaited.”

He feared massive closure of mills if the government fails to take timely action.

On the other hand, Waheed Khaliq Ramay of Council of Loom Owners Association told Dawn that the availability of Indian yarn has benefitted weaving, though its low quality posed problems.

He said Indian yarn had reduced the prices of 40, 52 and 80 singles yarn that were common in use. He said now spinners were not in a position to exploit the weavers.

Ramay suggested that the government should devise a strategy to support weaving sector without hurting the local spinning industry.

Shahid Ali, a trader of fabric, told Dawn that the rate of fabrics was not stable because of influx of the Indian yarn as the buyers have panicked. He said availability of Indian yarn had increased the production and reduced the buying power of customers.He said different qualities of fabric have witnessed a fall in price by Rs4 to Rs6 per metre.