20000215

$200m bed linen,

towels export

orders in jeopardy

MUZAFFAR QURESHI

KARACHI: Export orders for bed linen and towels worth 200 million dollars booked at the world's famous Heimtextil fair in Frankfurt in mid-January are in jeopardy due to 20 percent increase in yarn prices, exporters feared.

They said orders were booked on the basis of then prevailing prices of yarn which had since then increased by at least 20 percent making the export orders unfeasible. The orders booked at Heimtextil were likely to be cancelled if the yarn prices did not come down, they said, adding that the cancellation of orders would bring a bad name to the country in the export market.

Exporters who booked orders at the fair have three months to fulfil their commitment and they are waiting for rising yarn prices to come to the previous level so that they could manufacture export orders on a price decided with the customers.

" Nobody would like to make shipments of goods bringing loss to the value-added textile exporters who are already suffering loss in their exports to the European countries due to continuous depreciation of EU currencies against the dollar", said Shabir Ahmed, a leading bedwear exporter. He said keeping in view the increase in yarn prices and depreciation of European currencies the total loss to exporters would be 40 percent.

He said that as a result of the bumper cotton crop, the prices of cotton had come down by 50 percent whereas there was no decline in prices of yarn in the same ratio. Exporters had booked huge orders in view of cheaper raw material due to the bumper crop but now they were in a fix and were unable to fulfil their export commitments, he added.

Shabir demanded of the government to slap 10 percent duty on the export of yarn which would have a marked effect on the prices of yarn in the local market and its availability.

He said the spinners had bagged all the benefits from the excellent cotton crop by purchasing the same at cheaper prices and hoarding it creating artificial shortage which had resulted in increase in yarn prices.

Abdul Razak Dawood, Minister for Commerce, Industry and Production, had visited stalls of Pakistani exporters at Heimtextil fair this year and provided them guidance for marketing quality products. Due to the changed marketing strategy, exporters had booked substantial orders which were now in jeopardy.