Custom Duty imposed on the import of cotton yarns has been withdrawn by The Economic Coordination Committee (ECC) of the cabinet. Previously, the 5 percent regulatory duty fee was also renounced in last December by the government. Till June, it is expected that the custom duty will remain at zero. Moreover, “the approval of the cabinet,” is also subjected announced Razak Dawood, Adviser to Prime Minister for Commerce and Investment.
The textile sector and textile exporters are in a state of constant dilemma due to dollar depreciation against Pak Rupees from 164 to 153 and an increase in prices of cotton yarn more than 40 percent and 700 percent increase in sea freight charges. As a result, the value-added textile exporters are face to face with financial trouble as they cannot make up for the manufacturing cost. Even though, the prices of yarn are seeing a reduction, it is still out of budget for the textile exporters.
As a diminution is recorded in the crop output and a growing caution of downbeat cotton outlook, the textile business sector has their guard up as there is a chance that the prices may also increase.
The sector is also holding out hope that the industry can get a hold of export orders diverted from countries under coronavirus lockdown. Pakistan is grappling with a challenge to reverse falling cotton production that was estimated to fall 40 percent. Textile businesses has again started to see a glimpse of hope to build international competitiveness considering an exchange rate- driven erosion of margins.
