Pakistan Yarn Merchants Association (PYMA) has criticised National Tariff Commission (NTC) for imposing antidumping duties ranging from 3.25% to 11.35 % on import of polyester filament yarn from China and 6.35% on import from Malaysia.
The total requirement of art silk fabric manufacturing industry (which mainly consists of small and medium-sized units) is more than 220,000MT per annum. However, four local producers of polyester filament yarn have the capacity to produce only around 8,500 MT of fully drawn textured polyester filament yarn (which is only 4% of total requirement of downstream weaving industry) and producing around 53,000 MT of drawn textured polyester yarn (which is only 25% of total requirement of downstream weaving industry), while remaining 75 percent requirement is met through imported yarn.
Chairman PYMA Muhammad Usman was of the view that the NTC has imposed anti-dumping duties on all exporters of the PFY from China and Malaysia, which means that the user industry will pay anti-dumping duties on 75% of their requirement of the PFY, which the domestic industry is unable to meet. The user industry would be unnecessarily penalized even for the imports quantities, which the domestic industry cannot supply, he added.
The chairman NTC and one DG are travelling to Canada to defend Gatron Industries Ltd Karachi in an anti-dumping investigation initiated against PET resin exported from Pakistan. The PYMA alleged that local producers of PFY takes the liberty to walk into the offices of concerned senior officers of the NTC at their own discretion without appointment and spend hours there lobbying and influencing their decisions. Therefore, Gatron Industries started claiming in the market well before the announcement of preliminary determination by the Commission that anti-dumping duties between 9% and 15% will be imposed.
The association has further alleged that Robina Ather, one of the members of the Commission, in her letter to the secretary commerce-claimed that it has been increasingly becoming a cause of concern that the Commission is not functioning properly and not giving results it was supposed to. According to her, the Commission’s meetings are not held regularly and there are no minutes of the decisions taken in the meetings and, above all, decisions are not implemented.
According to her, in fact, there is no schedule, no procedure for conducting meetings and taking decisions, and resultantly, undue advantage is being taken by one of the members to influence investigations and manoeuvre Commission’s decisions. The Commission’s decision to impose unnecessary anti-dumping duties on imports of PFY is also result of maladministration and mismanagement in the Commission and shows that the decisions are not taken on merit by taking into account the impact of anti-dumping duties on downstream user industry.
Polyester filament yarn is imported by a number of small and medium-sized art silk fabric manufacturers, who are catering to the fabric demand of women of middle and low-income classes, which is the major population of Pakistan. The anti-dumping duties imposed by the NTC would increase substantially the cost of user industry (art silk weaving and knitting industry). Besides, fabric manufactured from polyester filament yarn and garments made of art silk fabric are also exported and imposition of anti-dumping duties would hurt exports worth millions of dollars, besides creating unemployment for thousands of skilled workers.
Pakistan Yarn Merchants Association published an appeal to the Prime Minister on August 24, 2017, informing the PM that polyester filament yarn fabric manufacturing industry comprising over 200,000 looms (SME sector) is already paying customs duty of 11%, the highest duty as compared to all other items in polyester chain.
Moreover, local producers of the PFY with their unlimited resources and lobbying succeeded in convincing the FBR to impose 5% regulatory duty. With the imposition of 6.35% to 11.35% anti-dumping duty, the downstream art silk fabric industry has been forced to pay total import duties between 21.35% and 32.70%. However, the finished product polyester filament fabric (art silk fabric) is importable at customs duty rate of 16% + 5% RD.
Total import duties on imported polyester filament fabric come to 21%, resultantly the polyester filament fabric will be cheaper than its basic raw material ie polyester filament yarn. Muhammad Usman said local producers of polyester filament yarn can only meet 25 percent of the downstream industry’s demand, while remaining 75 percent requirement is met through imported yarn.