Weekly Textile News Update
Letters of
credit margin at 10 percent to maximise revenue in last
quarter of current fiscal |
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| KARACHI (February 21) : The reduction
of L/C margin to 10 percent and introduction of a new
Valuation Manual is likely to help Customs Appraisement
in generating maximum revenue in the last and final
quarter of the current fiscal year, according to a
spokesman of the Collectorate of Customs (Appraisement). The spokesman told Business
Recorder on Saturday that the multipronged
strategy adopted by the Collectorate to generate maximum
revenue included disposal of uncleared goods through
frequent auctions, timely encashing of bank guarantees,
speedy disposal of cases under adjudication. He said that the reduction of L/C
margin had a positive impact on imports which had
stagnated during the post-blast period due to the
imposition of 30 percent L/C margin by the State Bank of
Pakistan. There were reports that a large number of L/Cs
had been opened and their impact on revenue generation
through Customs duty would be felt from March onward. The spokesman said that the revenue
generation strategy had also banked on the introduction
of the new Valuation Manual which would be released next
week. The Valuation Manual, is reported to have a record
number of items. This would help Customs appraisers to
apply correct values to imports yielding maximum revenue.
Efforts will be made to apply correct values to the
imports in consultation with the Valuation Department and
the concerned associations. All Customs officers have been directed
to ensure speedy clearance of cargo after realisation of
duty. Accordingly all bottlenecks obstructing prompt
clearance of goods will be removed, the spokesman added. The Collectorate has also decided to increase vigilance to ensure that genuine duty is charged on goods and there is no leakage of revenue through unholy collaboration between the appraisers and the dishonest importer. All senior officers have been asked to ensure their presence on both the wharves of the port to supervise the examination activities. The maximum use of the Express Lane facility which ensures speedy clearance to the bonafide importers has also been recommended as a revenue generation device. |
Business down on cotton market |
KARACHI
(February 20) : The volume of business dipped on the
cotton market as spinners seemed to take a breather on
Friday, brokers said. Besides this, Friday's are
generally lean days from trading point of view, they
said. Spot rates stayed put as
the picture remained hazy and confused with unsold cotton
in huge quantity lying at the ginners -- according to the
latest PCGA release around 1,399,233 bales. Anyway, Niab
was unchanged at Rs. 2397.50, K-68 at Rs. 2616 and MNH-93
at Rs. 2654.75 with sales tax. In ready, where some 2500
bales changed hands, prices remained between Rs. 2100 and
Rs. 2300 without sales tax (ST). The futures in New York
turned generally lower. The only exception was March
which closed higher by 0.56 cents to 58.19 after trading
between 58.25 and 57.15 cents a pound. May lost 0.2 cent
to 57.74 after trading between 57.85 and 57.20 cents a
pound. Experts have been
commenting now in louder tones that spinners' buying
tempo so far manifests local cotton would continue to
receive buyers attention. "Spinners have been
looking for quality cotton even at higher asking
prices," they said. Following deals were
struck: 300 bales of Jam Sahib done at Rs. 2155 (to pay),
300 bales of Bucheri, 300 bales of Nawabshah and 700
bales of Bhiria City at Rs. 2100 each and 600 bales of
Sadiqabad (45 days' credit) at Rs. 2300. KCA
SPOT RATES (1998-99
CROP PER MAUND): Niab: Rs 2397.50; K-68: Rs
2616.00; MNH-93: Rs 2654.75. |
NTC to take
up filament yarn dumping issue on 24th
By Sabihuddin Ghausi
KARACHI, Feb 20: The National Tariff Commission is taking up next
Wednesday (Feb 24) the case of the domestic filament yarn
industry, which has complained of dumping of synthetic yarn in
the domestic market at a virtually throw-away price causing a
massive build-up of unsold yarn inventory in local factories.
End user of the synthetic yarn is the highly fragmented local art
silk industry, which too is hard pressed because of the shrinkage
of synthetic textile market within the country and outside.
However, a small number of the art silk manufacturers are
reported to have opted for switching over to synthetic art silk
yarn of the East Asian countries to cut down on their production
cost and make their products competitive.
Still groaning under the impact of June 1997 currency devaluation
shock and the subsequent implications on their economies, the
synthetic yarn manufacturers in Malaysia, Thailand and Taiwan
have found Pakistan a convenient dumping ground.
"In a single month of January 1999, the import of synthetic
art yarn swelled to 2,180 tons as against 1,257 tons in December
1998 and only 848 tons in January 1998," owner of a small
size unit of filament yarn quoted the official trade figures
released by the Federal Bureau of Statistics.
According to the local filament yarn industry, the cost of
imported yarn in last November was worked out at about Rs 31 per
pound. "We cannot attain a break even at Rs 33 a pound
because of high production cost," a local manufacturer said.
He said the disparity between the landed cost of the imported art
silk yarn and price of the locally produced yarn has further
widened in February.
Following the reduction of cash margin to 10 per cent from 30 per
cent on imports, the manufacturers of the filament yarn fear
acceleration at a much greater pace of the import of art silk
yarn in the coming weeks which would completely cripple the local
industry.
Senior bankers estimate a total investment of Rs 15 billion in
the 21 units of the filament yarn in the country. They endorse
the complaint of the manufacturers that domestic industry has
been hit hard by art silk yarn dumping from East Asia.
According to the reports prepared by the banks and the financial
institutions, out of 21 units three are already closed and five
are defaulting on servicing of their loans. But the other units
are also not in sound position and are likely to cave in under
the mounting pressure of inventory build-up of unsold yarn
because of unabated dumping.
The NTC is however handicapped in absence of any anti-dumping law
in the country. The legislators do not consider the framing of
anti-dumping law a serious issue and has been sitting on the
draft for the last many years.
In absence of a such a law, the local manufacturers said that
only way out was that government should impose regulatory duty
for six months and watch the market. "This is being done in
India," a textile mill owner said.
The manufacturers are proposing a regulatory duty of 15 to 20 per
cent on yarn import and withdrawal of Rs 2.5 per kilogram excise
duty on the local production.
They also want the premium quality of texturised filament yarn of
150 denier be placed on the Import Trade Price (ITP) manual.
As art silk weavers have opted for the imported synthetic yarn,
the local spinners are gradually switching over to the imported
fibre causing sleepless nights to the owners of the local
industry.
"In January alone, we have lost 10 per cent of fibre market
to imports," Ahmad Ibrahim of Al-Karam informed Dawn.
He said the average unit prices of imported fibre has come down
from 81 cents a pound a few months ago to 55 to 60 cents a pound.
Official figures show that import of fibre during July 1998 to
January 1999 has jumped up to 39,286 tons as against 34,757 tons
in the same period of 1997-98. "Fibre import is on rise and
six out of seven local units are reporting building up of the
inventory," Ahmad Ibrahim said. He said the local fibre
manufacturers have taken up the case of fibre import with the All
Pakistan Textile Mills Association. The fibre manufacturers also
want a levy of 20 per cent regulatory duty and removal of the
excise from the local production.
Local automobile dealers also report of dumping of about 12,000
to 15,000 units of Chinese made motorcycles.
They said that Chinese motorcycles of 70 c.c are 20 per cent
cheaper than the locally-made motor cycles but not as durable as
the Pakistan made.
The local manufacturers have informed the Engineering Development
Forum (EDF) of the dumping of Chinese motorcycles in the local
market where the sale of domestically produced two wheelers has
dropped down to less than 90,000 units in 1998 from 112,000 units
sold in 1996.
Simultaneously there are reports of Indian made auto parts have
swarmed the domestic market which has virtually crippled the
domestic vendor industry.
Market analysts say that India was now meeting almost one third
of the domestic market requirement and has actively engaged a
large number of local vendors for this purpose.
Concern at Fall in Yarn Exports
KARACHI, Feb 20: The All Pakistan Textile Mills Association
(APTMA) has expressed its concern over decline in exports of
textile sector and urged the government to take immediate
remedial measures.
In a detailed statement on the affairs of the textile sector, the
APTMA, vice chairman, Sindh-Balochistan zone, Nadeem Maqbool said
here on Saturday that Pakistan's textile exports dropped by 13
per cent in terms of value during the first 7 months of current
fiscal year.
He said that significant decline has been registered in the
exports of yarn which declined by 25% quality wise and 15% in
quantity while cloth exports plunged by 16% and 6% in terms of
value and quantity as compared to the exports during the same
period last fiscal year.-APP
Cotton crop short by a million
bales from last year |
LAHORE (February 20) : As
the trade attempts to conduct its final tally, this
year's (1998-99) cotton crop appears to be short by one
million bales (170 kilograms) in actual count compared to
the last year. On de facto basis,
including both the recorded and the unrecorded output of
lint which rolled out from the ginning factories last
year, Pakistan produced nearly nine million bales (170
kilograms) of cotton during 1997-98, out of which about
8,355,000 bales appeared in the statistics, declared by
the Pakistan Cotton Ginners Association (PCGA), but in
fact another 600,000 to 700,000 bales (170 kilograms)
were also reportedly pressed by the ginning factories but
failed to appear in the records. This year (1998-99) the
declared cotton output as per the figures of the PCGA,
which Was slightly more than 7,000,000 bales upto the
15th of this month and may increase by another 200,000 or
300,000 bales, would add up to about 7,300,000 bales (170
kilograms) which will appear in the formal statistics.
However, the real output of ginned cotton may be about
8,000,000 bales this year, which would be short by one
million bales compared to the actual output of nine
million bales achieved last year. Thus, this season's
output would be short by more than two million bales
compared to the official target of 10.5 million bales
(170 kilograms) on ex-farm basis. The cotton merchants in
Karachi claim that actual need of the textile mills
during the current season (September 1998 to August 1999)
is close to nine million bales of cotton, which makes
this year's lint output in Pakistan woefully short of its
genuine requirements by nearly one million bales. The
domestic spinners have booked An estimated 400,000 bales
(480 pounds) of imported cotton already, while purchase
of another 100,000 to 200,000 bales cannot be ruled out
later in the season to cover the anticipated deficit. However, due to tightness
in liquidity and bad textile markets both here and
abroad, the mills may curtail some of their yarn
production, thus reducing their cotton requirements on a
considerable scale. Moreover, a number of Pakistani mills
are now switching to produce finer counts of yarns and
also better quality of value-added fabrics and garments,
which could also reduce cotton consumption in the country
on marginal basis. Nevertheless, cheaper and cleaner
imported cotton often contamination-free, have come into
favour with a number of domestic spinning units. The appearance of domestic
cotton shortage is now sinking gradually into the psyche
of the cotton market, which may be the reason for a
steadier appearance in the domestic cotton values. There
was also a report that a few mills were having difficulty
in opening their letters of credit for the imported
cottons, but such information could not be verified.
However, most mills have reportedly opened their letters
of credit for imported cottons on fairly regular basis. The cotton turnover in the
ready market on Friday was reported by the Karachi
brokers to be about 3,000 bales till the afternoon
against a reported sales volume of nearly 10,000 bales on
last Thursday. However, the tone of the market reportedly
remained steady with the cotton ginners now possessing
less than 1.4 million bales of unsold cotton, which may
deplete during the following few months. Without the 15 percent
sales tax, 300 bales of cotton each from Bandi and
Nawabshah and 700 bales from Bucheri in Sindh reportedly
sold at Rs. 2,100 per maund on Friday, 300 bales
of good average cotton from Jam Sahib (near Nawabshah)
sold at Rs. 2,155 per maund (37.32 kilograms),
while 600 bales from Sadiqabad in the Punjab were said to
have been sold at Rs. 2,300 per maund on a credit
of 45 days. The tone of the cotton market continued to
remain steady in the evening despite the approaching
weekend. |