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Pakistan:Exporters fear price wars as MFA ends in Jan 2005 |
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2004-9-9
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Pakistan :8th September 2004 |
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Price war ahead of the quota-free regime beginning January 1, 2005, which could invite immediate safeguard measures from importing countries of the West, fear exporters.
While buyers will be pressured to share the quota costs, by the year end, to maintain their market share or even exceed in the free-market, exporters would be more than willing to oblige.
However, this will lead to a price war and cut-throat competition, causing many closures or even bankruptcies, but would also provide a gap to the cheap quality producer to enter the world market.
Implications of this were altogether different and could have far reaching consequences on suppliers of textile goods as per former Chairman Pakistan Bedwear Exporters Association and an exporter.
The emerging scenario call for prompt government interrvention taking necessary measures to avoid any debacle if the situation goes unchecked and unbridled say exporters.
Many countries have drawn up plans to save their world market share in the post-quota regime. However, the fears include internal as well as external competition that would have dual impact on the state of survival of the exporters.
Only those exporters will survive who have better technology and are efficient in their production, is is understood.
Other irritants and challenges for exporters were dealing with a large number of government departments collecting levies and other taxes on account of labour welfare, old-age benefit etc., which are yet to be resolved by the government.
"We are hardly left with time to work on product development or quality control as these departments continue to irritate and waste time of the exporters," lamented Pakistan Hosiery Manufacturers Association (PHMA) Chairman Imran Ali Sabir.
Falling cotton prices are causing another pain, adding to deflationary pressures. But rising prices of man-made fibre like polyester and surging POL prices, resulting in higher transportation cost and wages, were rearing new challenges to the exporters at a time when factors - both internal and external would be beyond their control.
Confronted with such an alarming trend, the exporters have demanded of the government to establish minimum export prices of all range of textile products. "This will help the country from losing the market and save the industry from unhealthy and damaging competition within the country.
If the government fails to work out such mechanism there was a distict possibility of importing countries taking advantage of the falling prices and activate safeguards, such as anti-dumping duties, embargoes etc. |
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