Regulatory duty on yarn export expires
The Cabinet Committee on Textile on Monday decided not to extend the 15 per cent regulatory duty on export of yarn and directed the ministry of textiles to regularly monitor the yarn supply situation in the domestic market.
The committee headed by Finance Minister Dr Abdul Hafiz Sheikh observed that the free market mechanism has to be implemented in the country to enable all the segments of the textile industry to be able to stand on their feet in a competitive environment.
“We have decided that free market system should prevail and there has to be no government intervention in the market as far as export or import is concerned,” Minister for Food and Agriculture Nazar Muhammad Gondal told media after the meeting.
The committee also directed the textile ministry to monitor the domestic availability of the commodity.
The regulatory duty on export of yarn expired on Monday. It was imposed for two months to ensure yarn availability in the local market after serious pressures from the value-added sector that they were forced to import yarn to meet the export orders.
The meeting was attended by Rana Farooq Saeed Khan, federal minister for textiles, Hina Rabbani Khar, state minister for finance and economic affairs and Dr Nadeem-ul-Haq, deputy chairman Planning Commission.
The 5th meeting of the cabinet committee on Textile held on Monday noted that the disputes between the value-added textile and spinning sectors might flare up after the regulatory duty on export of yarn is not extended.
Sources said that the officials of the finance ministry, including the finance minister supported the move to remove the regulatory duty.
“The value added sector has to adapt to the moving market,” the finance minister said and added that the support for the apparel and hosiery sector through the imposition of regulatory duty on yarn export for two months has been enough to meet the export orders in the last fiscal year ended on June 30.
It may be recalled that the standing committees of the Senate and the National Assembly on Textile had recommended to the government to extend regulatory duty on export of yarn up to August 26, 2010 to ensure yarn availability in the local market.
The officials of the ministry of food and agriculture informed the meeting about the latest situation regarding phutti arrivals and production, export trends and availability of yarn for the value-added sector.
The official statement said that the meeting also decided that the situation regarding domestic availability of yarn will be carefully monitored and meeting of the cabinet committee will be convened whenever expedient.
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