Textile millers producing polyester filament yarn have demanded that the government continue charging anti-dumping duty (ADD) on the import of polyester filament yarn (PFY) for at least five years to discourage the dumping of yarn in the country, mainly from China.
PFY is a raw material for knitting and weaving to make polyester fabrics like clothes, curtains, bed sheets, ropes, etc.
They pointed out that current ADD levels in Pakistan were low compared to what was imposed by other countries against China. However, even at these low levels (in the range of 2.78 percent to 6.82 percent or on an average of 4.8 percent), the continuation of ADD and its effective collection in Pakistan for next five years is essential.”
The outgoing year was a challenging period for the manufacturers of manmade yarn being characterised by a severe politico-economic crisis. Moreover, dumped imports of PFY continued despite falling foreign exchange reserves and LC (Letter of Credit) opening difficulties.”
The dumping was mainly due to the Chinese mega expansions over the last two years. It was said that producers in China wanted to start their new capacities and companies to operate above 90 percent to give a good picture to banks and local governments to allow them to fully draw their loans for completing their expansions, the local company said in the report.
Importers have somehow evaded/ still not paid ADD for much of the previous six years. They get a stay in one high court, which is dismissed in five or six months. Importers have so far made a mockery of the government’s efforts to collect ADD on PFY with over Rs16 billion remaining uncollected. However, the government has restored in December 2022 the 5 percent regulatory duty on imports to counter the impact.
Countries including Turkey, India, the US, and Vietnam have imposed ADD in the range of 16-32 percent on the Chinese PFY. Brazil, as well as Mexico, have also initiated ADD on PFY from China.
The Chinese export of the yarn, however, has continued to grow notably in the past four years, from 2019 to 2022. Chinese exports of the product to Pakistan grew in the range of 13-48 percent in each of the past year years.
Now, however, with the Pakistani rupee appreciating, the traders are holding off on imports, which will help in reducing the imported inventory in the coming months. PFY is among the top imports, which should be produced locally, particularly when its raw material PTA is also produced in the country. It should also be kept in mind that in 2003 over 90 percent of local demand for filament yarn was met by indigenous production.