Fluctuating Yarn Prices Hit Small Spinning Mills in Pakistan
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- Published: Thursday, 04 January 2024 16:53
The textile sector, a vital contributor to Pakistan's economy, is grappling with challenges as the fluctuating prices of yarn create significant hurdles for small spinning mills. The impact is particularly pronounced on unit owners, both small and large, who are struggling to secure yarn at affordable rates amidst already escalating energy costs.
Small spinning mills across different localities, including Faisalabad, Lahore, Sheikhupura, Ferozwala, and Karachi, are feeling the pinch of the volatile yarn prices. Purchasing yarn from Faisalabad's renowned yarn market, known as 'Sootar Mandi,' millers acquire yarn on daily, weekly, fortnightly, or monthly bases.
Salamat Ali, former central chairman of the Pakistan Hosiery Manufacturers and Exporters Association (PHMA), highlighted the challenges faced by those who buy yarn daily, albeit in lower quantities. Speaking to WealthPK, Ali emphasized that the fluctuating yarn prices have added stress to purchasers already burdened by high costs of electricity, gas, and other raw materials.
"As a textile exporter, I have to quote rates to foreign buyers for their products a couple of months in advance," said Ali, underscoring the need for stability in yarn prices for effective planning in the sector.
Yarn trader Asim Ali echoed similar sentiments, emphasizing that the government should establish a comprehensive monitoring mechanism to control speculative buying of yarn, stabilize prices, and ensure a steady supply for the smooth functioning of spinning mills and other segments of the textile sector.
"The textile sector, which is the mainstay of the national economy, should function smoothly. This sector is perhaps not under the radar of the government despite its importance," said Ali, urging the government to focus on the textile sector to boost exports.
Zahid Ali, a yarn broker, raised concerns about the rising trend of speculative buying and selling of yarn, highlighting the detrimental impact on market mechanisms. He pointed out that many spinning mills had either closed or scaled down operations due to high electricity prices, and millers were struggling without government subsidies.
Rates of cotton, polyester cotton, and viscose have doubled over the last two years, according to Ali. Yarn trader Asim Ali suggested that the government should take a decisive stance, similar to past operations against fake invoices, to curb the unchecked trend of speculative yarn business.
The situation calls for urgent government attention and intervention to stabilize yarn prices, provide support to struggling spinning mills, and ensure the continued smooth operation of this crucial sector, which plays a pivotal role in job creation and foreign exchange earnings for the country.