The Pakistan government has refused monetary compensation for the cotton sector for export orders it booked on the presumption that Pak Rupee would further depreciate against the US dollar. Government said, the consequences of their decisions need to be borne by commercial entities themselves.

Some VAS representatives recently met Prime Minister’s Adviser on Commerce Textile and Investment Abdul Razak Dawood to seek compensation for their losses. These representatives contended that they did not book the rupees in advance presuming rupee depreciation would continue. However, the unprecedented depreciation of the US dollar and appreciation of Pak Rupee from 165 to 152 has inflicted loss to the VAS exporters.

The VAS representatives also complained about non-availability of yarn. The officials said that they have been told that not yarn availability but prices have been the bone of contention all along. The officials said All Pakistan Textile Manufacturers Association (APTMA) has already refused to support the VAS demand for monetary compensation for the loss it sustained due to its commercial decisions and its stance on the availability of yarn.

The official said that according to APTMA, all-time high cotton prices in other countries resulted in increasing yarn prices. Currently Indian markets are temporarily having excess yarn due to COVID-19 as last year their exports fell significantly. Indian merchants are willing to sell their inventory at lower prices. Despite this, APTMA has never demanded the government allow import of cotton from India. It believes that the policy on the acquisition of non-operational/ sick/ in-troubled units will address the yarn shortage by adding 1,000 tons per day or 30,000 tons per month due to the addition of 600,000 spindles to operational capacity.