PAKISTAN TO GET ADDITIONAL TEXTILE QUOTA

Pakistan will get additional quantity of textile quota from the European Union after the induction of 10 new member states on May 1, 2004. This quota will be enhanced on the basis of past performance of Pakistani exporters to 10 new states in the last three years from 2001 to 2003.
These new states are the Czech Republic, Estonia, Cyprus, Lithuania, Latvia, Hungary, Malta, Poland, Slovenia and Slovakia.

In this regard, the Export Promotion Bureau (EPB) has asked those Pakistani exporters who had been exporting textiles and clothing to 10 new member states of EU during 2001 and 2003. This data will be used for claiming enhancement of Pakistani quota in the enlarged textile quota from the European Union.
The EPB will make allotments on the basis of these documents to the exporters of these new states.

PERU IMPOSES DUMPING DUTY ON PAK FABRICS

The government of Peru has imposed 34.7% anti-dumping duty on Pakistan's fabrics. Peru government on the complaint of Peru Pima Sa - a textile company - initiated an anti-dumping case on July 26, 2002 against five Pakistani exporters, alleging that they were dumping fabrics in Peruvian markets.

With the initial findings they have collected, the Peruvian government had imposed a provisional duty of 33% on Pakistan's fabrics on October 12, 2003. And finally Peru notified 34.7% anti-dumping duty on Pakistan's fabrics from March 6, 2004.

The sources said that the Commerce Ministry should now consult all the exporters against the dumping duty to fight the case at the WTO Dispute Settlement Body (DSB) because Peru had not conducted the investigation according to WTO provision and laws. Some of the recent anti-dumping duties against Pakistan includes: 13.1% by the European Union on bed linen; 29% on matches by Egypt; and now the third case of 34.7% on fabrics by Peru.

HIGH-TEST CHARGES FOR PRODUCTS HIT SMALL EXPORTERS

High charges taken by the government-owned ECO Textile Laboratory for making various tests are causing a lot of problems for small and medium exporters who have to meet the conditions laid down by their foreign buyers. The small and medium sized exporters have to pay high charges for various tests required for export goods.

The Synthetic Fibre Development and Application Centre, ECO Textile Laboratory, set up with a cost of Rs 68 million dished out from the Export Development Fund (EDF) is of no benefit. The laboratory, which was established about three years ago, was to facilitate small and medium sized exporters for testing their export products as required by their customers. Furthermore, it was also visualized that the upgraded testing facilities would help meet the quota-free requirements.

Exporters complain that for one single test they have to pay around Rs15,000 to Rs 20,000, which puts extra burden on input cost of products. According to the price list of ECO Textile Laboratory for the year 2003, there had been an increase of around 30% in charges for most of the tests, over the previous price list of 2002.

EU AGREES TO REVIEW DUTY ON BEDLINEN

The government told the Senate that the European Union has agreed to review its decision to impose a 13.1% anti-dumping duty on Pakistani bedlinen. Commerce Minister Humayun Akhtar Khan said the government was consulting Pakistani exporters whether to wait for the EU review or go to Geneva to contest the duty before the World Trade Organization.
The anti-dumping duty was to be effective from April 1.

GINNERS URGED TO IMPROVE LINT QUALITY

Governor State Bank Dr Ishrat Husain has advised the ginners to improve quality of cotton in order to fetch higher prices for Pakistani cotton in the international market.
During his visit to the Karachi Cotton Association (KCA), he emphasized the need for training of workers of ginning factories and textile mills so that they could meet the challenges of the WTO regime.

He also suggested the ginners to install modern ginning plants for the production of quality and contamination-free cotton.

Discussing the issue of fluctuation in prices of cotton with the Board of Directors of KCA and other trade representatives, the SBP governor informed them that the government was following free trade policy in cotton, which allowed free exports and imports without any qualitative and quantitative restrictions.

Citing example of India, he said with the start of WTO regime Pakistan textile industry would be in a better position than that of India as Indian farm products were still being subsidized, whereas in Pakistan no agriculture product was being subsidized.

ASAP GLOBAL SOURCING SHOW IN AUGUST

'ASAP Global Sourcing Show' has offered certain incentives to Pakistan for the promotion of garment exports through participation in the show to be held in Las Vegas, USA, during August 2004.

ASAP is the largest garment sourcing show held in the United States and textile-exporting countries are planning big national pavilions to popularise their products in the US market.
The ASAP August 2004 will provide an excellent platform to garment producers to make an effective presentation at the time when most of the US buyers will be making their buying decisions for 2005. Featuring as a 'Focus Country', Pakistan would be able to present and establish its status as the leading producer of textile garments.

EPB TO PROMOTE PAK PRODUCTS IN WORLD MARKETS

Export Promotion Bureau of Pakistan (EPB) has planned a strategy for promotion of Pakistan made products in foreign countries. Under the programme, the EPB has announced a promotional scheme called "Promoting Products Made in Pakistan".

The scheme envisages promotion of products made in the country through display and retail sale in high traffic shopping retail outlets abroad as a supplier of quality goods.

The EPB will hire display or retail sale space in retail outlets abroad in consultation with the private sector and offer such space on a 50:50 cost-sharing basis to Pakistani exporters producing world class quality products.

The operation of the scheme will commence after agreements have been concluded for hiring such space in selected countries.

ITAC REDUCES IMPORT DUTIES ON CARPETS

International Trade Administration Commission (ITAC) of South Africa has reduced import duties on carpets from 30% ad valorem to 5% ad valorem.

According to the Export Promotion Bureau (EPB), ITAC administers trade matters on behalf of Southern African Customs Union (SACU), comprising of Botswana, Lesotho, Namibia, Swaziland and South Africa.

ITAC has reduced the duty effective from February 20, 2004, mainly for the reason that hand knotted and woven carpet, commonly known as "oriental carpets and rugs" are not manufactured in SACU region, nor they will be in future due to high cost. The cut in duty has created an opportunity for Pakistani carpet exporters to make inroads in this market.

EXPORTS TO ACHIEVE $12 BILLION TARGET

Chairman Export Promotion Bureau of Pakistan (EPB) Tariq Ikram said that exports of the country have been on increase for the last fours year and the current momentum of growing exports would greatly help in achieving the target of $12 billion set for the current year.

Addressing the members of Sialkot Chamber of Commerce and Industry (SCCI), he said that overall exports have amounted to US$ 8 billion so far. He was of the opinion that recent increase in export was mainly due to the diversification made in the product and geographic sectors.

Tariq Ikram further informed the house that geographic diversification had brought numerous markets in Eastern Europe and Africa for our products adding that export of the country to Eastern Europe and Africa had increased up to 44% and 37% respectively during current year.

EU NOTIFIES INCREASE IN TEXTILE QUOTA

The European Union (EU) has notified the enhancement of textile quota in all (14) categories after acceding membership to 10 new states. According to Export Promotion Bureau, no export licence will be required for shipment made from April 30, 2004 to the 10 acceding countries to EU.

The categories enhancement is as under: Cat 1 (513,000 kgs), Cat 2 (1,775,000 kgs), Cat 2-A (936,000 kgs), Cat 3 (2,971,000 kgs), Cat 4 (218,000 Pcs), Cat 5 (78,000 Pcs), Cat 6 (218,000 Pcs), Cat 7 (13,000 Pcs), Cat 8 (14,000 Pcs), Cat 9 (447,000 kgs), Cat 20 (1,216,000 Pcs), Cat 26 (15,000 Pcs), Cat 28 (7,000 Pcs), and Cat 39 (108,000 kgs).

END OF DUTY ON COTTON WASTE IMPORT URGED

Pakistan Open End Spinners Association (POESA) has urged the government to abolish 25% customs duty on import of cotton waste in order to overcome its shortage. Submitting proposals for the forthcoming Federal Budget for fiscal year 2004-05, the Association also stressed complete ban on cotton waste export.

The Association also demanded withdrawal of sales tax on machinery and spare parts import and said import of machinery should be duty free. It also demanded rationalisation of electricity tariff to save the industry from complete destruction.

GARMENT EXPORTS DECLINE BY 26%

Readymade garment exports dropped sharply by 26% in terms of quantity and 8.5% in terms of dollars during the last nine months of the current financial year, signalling a possible fallout effect of the rise in exports of cotton cloth and yarn.

Garment and hosiery merchants speak of shortages of cloth and yarn in the domestic market and a price hike that are making their business difficult. Garment exporters speak of problems but are not aware that there has been a sharp drop in export volume.

Garments are one of the five items belonging to a billion-dollar club of the textile groups. The other four items of this group are yarn, cloth, knitwear and bedwear. In the last nine months, garment exports fetched $726.85 million as against $794.82 million in the same period last year.

Aziz Memon, Chairman of the Textile Quota Management Advisory Council, considers it a temporary phenomenon before December 2004 after which all textile export quotas are to be dismantled. He said that garment exporters are at present preparing for a long-term business vision after December 2004 when they would be in the mainstream of global export competition after dismantling of quota regime.

PAKISTAN ASKED TO SET UP SPINNING MILL IN UGANDA

Uganda has stressed the need to explore the possibilities for promotion of bilateral trade and asked Pakistan to set up a spinning mill in their country.

This was said by leader of the visiting twelve members cotton/textile trade delegation from Uganda, Cecilia Atim Ogwal during a meeting with the Federal Minister for Industries and Production, Liaquat Ali Jatoi.

She said that Pakistan could also get benefitted by growing cotton in their country, as there is vast potential for exports and Pakistan is rich in cotton production.

She also offered Pakistan to invest in the manufacturing and garments sector, as their country is business friendly with number of tax holidays. She said that Uganda is very attractive for investors and various countries are joining them in industrial sector.

GOVT TAKING STEPS TO PROMOTE INDUSTRIES

Minister for Industries and Production, Liaquat Ali said the government is taking a number of steps for the promotion of industries throughout the country. In a written reply to National Assembly, the Minister said a long-term policy framework has been formulated relating to the development of industries.

About steps taken by the government, he said a Textile Vision had been launched to shift the focus of export to value added production from existing $4.9 billion to $13.8 billion by 2005.
Jatoi said realistic measures were taken by removing tariff anomalies including reduction of duties on raw material. Duty and tax-free investment environment in form of Export Processing Zones was being expanded constantly, whereas the textile cities have already been announced as special zones. About intellectual infrastructure, the Minister said services of senior volunteers and policy experts in the textile sector are being sought under Japan International Cooperation Agency (JICA).

1.5 Million Bales Lying Unsold WITH GINNERS

While cotton prices are falling, ginners are still sitting at 1.5 million unsold cotton bales fearing more losses with declining demand and higher production. Ginners said their earlier prediction about low cotton production proved wrong and the total cotton crop is very close to 10 million ex-ginned bales.

Ginners have been claiming that the overall production would not exceed 9.3 million bales but later they amended it to 9.5 million bales and now finally they have settled at 10 million bales. Ginners said that the production has already exceeded 9.8 million bales and it would conclude with 10 million bales at the end of the season.

US DUTY ABOLITION WON'T BENEFIT PAKISTANI RUG INVENTORIES

The planned abolition of import duty on Pakistani hand-made carpets by the United States will not benefit the rug inventories in Pakistan, as the existing import duty is only 2%. Pakistani rugs might get Generalised System Preferences (GSP) concessions in the US. The US administration is planning to abolish the import duty, which is currently 2% only.

The proposed zero percent import duty under the GSP will also be available for Afghani hand-made carpets. This step by the US administration is seen as a compensation for Pakistan and Afghanistan, being Washington's frontline allies in war against terrorism.

Currently, export of Pakistani carpets to the US is around $ 100 million annually. Besides Pakistan and Afghanistan, India, Turkey, Azerbaijan, Georgia, Armenia, Turkmenistan, Kazakhstan, Uzbekistan and a few other countries also export hand-woven carpets.

According to figures of the Federal Bureau of Statistics (FBS), Pakistan's carpet exports have registered a fall of 19% in value and 25.5% in quantity in the aftermath of September 11 attacks. The carpet exports in 2001-02 stood at $ 233 million (4.75 million square metres) as compared to $ 289 million (6.4 million square metres) in 2000-01.

GOVT ASKED TO BAN EXPORT OF YARN

All Pakistan Cotton Power looms Association (APCPA) has demanded of the Federal Government to restrain the unlimited export of cotton and polyester yarn otherwise, it fears, the local textile and its ancillary industries would be closed down.

APCPA Chairman Rana Mohammad Ikhlaq and its Vice-Chairman Muhammad Akram Ghauri said that the government had failed to control the escalating prices of cotton and polyester yarn during last eight months.

They claimed that due to increase in the prices of yarn and other raw material, the cost of production had reached beyond the comprehension of small industrialists owing to which thousands of power looms had been closed down and scores of daily wage earners had been rendered jobless.

They further claimed that during 2003, the export of yarn was 38 million kg monthly, which now had been jumped to 57 million kg during the current year. The export of yarn in bulk has also hampered the business activities of local textile sector.

CHINA PLANS TO SET UP LARGE SPINNING UNIT

China has shown its interest to set up large size spinning unit in Pakistan with Chinese machinery to share technology development management and technical skills. The Chinese delegation, led by Wang Tian Kai, Vice Minister of China National Textile Industry Council expressed their interest during a meeting with Federal Minister for Industries and Production Liaquat Ali Jatoi.

The delegation said that Pakistan has a developed textile sector and is a strong player as such China does not want to be a competitor but instead wants to be a partner with Pakistan in textile manufacturing and textile trade.

The Minister for Industries and Production, Liaquat Ali Jatoi appreciated the proposal made by China for setting up of spinning unit and offered them land in the proposed Textile City at a reasonable rate and stated that all the facilities will be provided there for investors. He said that the textile city would enhance our textile exports by $2.5 billion per annum additionally and generate employment for about 80,000 peoples. He informed the delegation that the textile sector is a priority sector and Pakistan's 75% exports based on textile.

SBP DEBARS EXISTING TEXTILE UNITS

State Bank of Pakistan (SBP) has debarred new and existing spinning and weaving units from availing financing facility - in foreign exchange - for importing plant and machinery on Balancing, Modernisation and Replacement (BMR) basis.

The SBP said, the facility shall not be admissible in case of plant, machinery, equipment and accessories already imported and also for commercial importers or trading houses or for the establishment of new projects in spinning or weaving sectors in textile groups.

However, the SBP said the same financing facility would be available for textile projects, to be established in the two proposed textile cities of Karachi and Lahore. The SBP has, however, allowed, "exporters or entrepreneurs who would enter into arrangements with foreign textile and clothing industries for re-location of their projects to Pakistan, to enable the exporters, both direct and indirect to cope with the post-quota environment".

It has said, by inviting foreign textile investors, the transfer of state-of-the-art textile technologies would be possible in the shortest possible time. Under this head, banks would also finance the charges to meet freight charges, machinery, equipment transfer cost - both foreign and domestic.

The facility would also be available to units located at Karachi Export Processing Zone and all Export Processing Zones and 'industrial cities' of Punjab that have yet to be established.

IMPORT COSTS RISE 25% ON HIGHER SURCHARGES

The Karachi Chamber of Commerce and Industry (KCCI) has started collecting data of surcharges levied on imported cargo under different heads by various shipping lines and plans to submit a report on the issue to the government.

Iftikhar Ahmed Shiekh, Chairman of the KCCI's Sub-committee on shipping and multi-model transport, said that the cost of imported cargo has increased by 20% to 25% due to the increase in surcharges and the imposition of new surcharges levied by shipping lines during the last year.

Mr Sheikh said there is no uniformity in these charges as application of rates varies from one shipping line to another and added in this situation importers are unable to make an actual assessment of surcharges to be paid to shipping lines.

YARN PRICES INCREASE BY 20%-25%

Textile raw material prices in the local market have surged by 20%-25% in cotton yarn varieties and nearly 20% in polyester cotton over the last six months, affecting Pakistan's competitiveness in the world markets.

In a statement, Rana Javed Akhtar, Senior Vice Chairman of the All Pakistan Cloth Exporters Association (APCEA), said that average price of 20s cotton yarn was Rs 507 per bundle in September 2003, which jumped to Rs 607 per bundle in April 2004, registering an increase of 20%. The price of 22s cotton yarn in September 2003 was on average Rs 517 per bundle, which jumped to Rs 645 in April 2004, showing a rise of 25%.

Consequent upon the rise in raw material prices the down stream textile sectors are facing difficulties. Nearly 10,000 powerlooms are reported to have closed down in the country. The sizing industry has also threatened that thousands of workers and labourers engaged in the sizing sector would be rendered jobless, contributing to further increase in unemployment figures.

The exporters demanded that the export of cotton yarn from the country should be totally banned in order to bring the prices of raw material in domestic market at reasonable level to sustain the down dream industries and exports of textile.

WEAK COTTON PRICES, DUTY TO HURT EXPORTS

Weak international cotton prices and a hefty anti-dumping duty imposed on Pakistani bed linen by the European Union will likely slow the country's key textile exports in the months ahead. Falling international cotton prices will reduce the unit price of Pakistani products, which will result in a drop in export proceeds, said a Karachi-based textile exporter.

Reports of higher output in major cotton-producing countries have depressed prices since early March. However, analysts and officials said they expect Pakistan to meet its export target of $12.1 billion for the current fiscal year ending in June, due to a cumulative double-digit growth rate during the first nine months.

BUYERS OF YARN FROM APTMA TO PAY SALES TAX

The Central Board of Revenue (CBR) has decided to compulsorily register all those with the sales tax department to whom supplies of spun yarn were made under the 'Special Procedure for Manufacturers-cum-Suppliers of Spun Yarn Rules - 2004' and recover due amount of sales tax from these unregistered persons under the Sales Tax Act, 1990.

Expanding the scope of registration drive, the CBR is also trying to register those persons as well those who are buyers of yarn from unregistered persons. The amnesty of further tax exemption for the textile sector will remain in force till June 30, 2004.

US SEEKS EARLY IMPLEMENTATION OF IPR LAWS

The United States Trade Representative's (USTR) Annual Report has appreciated progressive trade liberalization in Pakistan, but also urged for an early implementation of Intellectual Property Rights (IPRs) laws in the country to attract foreign investment.

The recently released 2004 annual report documents foreign trade barriers to US exports. The report covers 58 countries in all.

The report says that since 1998, Pakistan has progressively and substantially reduced tariffs. The government reduced all textile products from its "negative list". All textile products could now be imported into Pakistan.

The report stated that foreign investors were free to establish and own business enterprises in almost all sectors of the economy. The government's investment policy promises full re-partitions of capital, capital gains, dividends and profits with the approval of the State Bank of Pakistan. No restrictions exist on technology transfer.

AMERICANS HAVE $1 BILLION INVESTMENT IN PAKISTAN

US Consul General in Karachi Douglas C. Rohn said that American business community's investment in Pakistan is over $1 billion. Speaking at the inauguration of "USA Catalogue Show" held in collaboration with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), at the Federation House, the US envoy said that it was the first commercial exhibition held in Karachi after several years.

Mr Rohn pointed out that most of the companies exhibiting catalogues were small and medium enterprises. The US is Pakistan's largest trading partner. Pakistan exports to the US last year was some $2.3 billion roughly 25% of Pakistan's total exports. The US sold over $700 million worth of goods - mostly intermediate capital goods - the kind that increases general industrial and agricultural productivity.

TEXTILE MINISTERS TO BE APPOINTED AT THE CENTRE AND PROVINCES

Prime Minister Mir Zafarullah Khan Jamali has announced that Textile Ministers at Federal and Punjab levels will be appointed for the promotion of the textile sector, which, it is hoped, will contribute greatly to the national economy.

Mir Zafarullah Jamali said that Faisalabad's contribution to the national economy in terms of textile production and exports was tremendous. He hoped that this "city" would soon attain the status of a leading textile centre in the world.

APTMA LAUDS PM'S STATEMENT

M Waqar Monnoo, Chairman, All Pakistan Textile Mills Association (APTMA) has lauded the statement of Prime Minister, Mir Zafarullah Khan Jamali, regarding appointment of textile ministers in Federal and Punjab cabinets for promotion of textile industry. According to the Prime Minister these Ministers would supervise and monitor the process from the cultivation of cotton crop to preparation of textile made-ups as well as textile exports.

Mr Monnoo agreed that this step would boost the textile exports and would also result in resolving the problems of the cotton growers, ginners and industrialists. The APTMA chairman informed that textile-manufacturing sector continues to be, by far the largest economic sector of Pakistan which yielded 67% of the country's exports last year, and almost 38% of the total manpower in Pakistan is employed in textile sector. Thus the textile sector, both in the organized and non-organized sectors, has now grown to a size that requires separate and exclusive attention. Furthermore, the technical peculiarities and sophisticated methods of production have proved this sector entirely different from other manufacturing sectors.

MINISTRIES FOR TEXTILES TO HELP MEET NEW WTO CHALLENGES

Proposed ministries for textiles at federal and provincial level will greatly help to meet the challenges of new World Trade Order and resolve the emerging irritants of international trade, said Dr. Khurram Tariq, Central Chairman and Khawaja Muhammad Amjad Chairman, North Zone Pakistan Hosiery Manufacturers Association (PHMA).

In a joint statement, they said that hosiery exporters were bracing themselves up for the New World Trade Order of tough competition by standardising their products and minimising their costs of production. However, there were numerous new problems, which are coming up with the passage of time, and it was imperative that some competent authority should be available to tackle the new problems.

The PHMA Chairman also appreciated the efforts of Ahmad Kamal Chairman All Pakistan Cloth Exporters Association for boldly projecting the exporters plea and convincing Prime Minister to take this important decision for the national economy.

APTMA AGAINST PHMA'S DEMAND

Pakistan Hosiery Manufacturers Association's demand to levy duty or any kind of restriction on export of yarn has faced a huge opposition from All Pakistan Textile Mills Association (APTMA). Chairman APTMA, M Waqar Monnoo said that the real issue behind PHMA's move is to get quality yarn at cheap rates locally by restricting export, which is incomprehensible. Production of cotton yarn/mmf yarn is more than its requirement and substantial quantity of 1.55 million metric tons i.e. 75% of the total production of yarn is annually available for local consumption.

Monnoo refuted the impression that hosiery yarn or any kind of yarn is short and said that value added sector/PHMA should not have any complaint on the availability of required yarn. APTMA Chief also rebutted the allegation of PHMA that APTMA prefers to export on lesser rates rather to selling locally.

EXPORTS MARRED BY BELOW PAR PERFORMANCE IN SOME SECTORS

High export performance of the country is marred by below par performance in readymade garments, carpets and leather, handicrafts and chemicals where coordinated efforts could have taken exports to new heights. The cumulative decline in exports in these items declined by 10.03% during the July-March period of 2003-04 compared with the exports of these items during corresponding period a year earlier.

Market analysts have advised the Export Promotion Bureau and other related government departments to play their due role in facilitating the exporters in all sectors of economy. They regretted that the exports decline happened in some of the long established sectors. The analysts claimed all the fields where decline occur require product development and innovation to maintain sustained growth in world markets.