Apparel sector hit by high gas and electricity prices

LAHORE - Ijaz A Khokhar, Former Chairman Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA), urging the Prime Minister Syed Yusuf Raza Gillani concern to hold dialogue with textile bodies for solving their problems, said that apparel sector is the major sufferer of gas and electricity prices because all increase ultimately has to bear by the apparel sector as an end user. He said that with this increase, the sector would not be competitive any more. He said that cotton price have already gone up more than 60 percent within the last few months. He said that foreign buyers were not ready to accept this huge increase at present.  Ultimately they will divert their business to China, India and Bangladesh. Khokar pointed out that during this period of year, Christmas buyings worth US$ 2.5 billion are finalized but unfortunately situation is worse and exporters are reluctant to accept the new business because input cost are very uncertain and they are unable to finalize their costing for coming months. So, the government needs to give them some assurance by capping the utility costs so that they could make themselves able to enhance the export. The apparel sector requested the government to form the task force on permanent basis to form the short and long term trade promotion policy with consolations of private sector, he said adding, 'This will help to solve the problems and issues at early stages. Also this task force needs to establish the aggressive marketing plan as our competitors doing as well'. To over come this crucial time, he said that the sector requested to Ministry of Finance, Commerce and Textile to support this sector and enhance the R&D Support Fund 11 percent across the Board to establish the SME apparel sector. We assure to Government that this support will be returned to Government in shape of multiple taxes and increase of export will ultimately increase the employment. Khokar said that exporters are in difficult position to fulfil their commitments at the moment because they negotiated the business in January till 31 Dec 2008 but present situation expel them in corner and they are unable to supply the goods as per their negotiated prices of January 2008. 'If they force to fulfil their commitment they will loose out of pocket more than 30 to 40% of value goods. If they back out it will damage the country image and Pakistan will loose the creditability of reliable supplier' Khokar said. He also requested that Government should to encourage the valued added export by putting the ban on raw material export. This is the only way to increase the export of country and to meet the export target of US$ 22.0 Billons.

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