PSF makers refuse to withdraw dumping charge

LAHORE: Local polyester staple fibre (PSF) producers have declined a request from the textile ministry to withdraw dumping charges against Chinese and other Far East exporters of the man-made fibre so that textile industry may import it to meet its shortage for domestic production.

Textile ministry officials told Dawn on Friday that the PSF producers’ refusal to withdraw the complaint filed with the National Tariff Commission (NTC) a couple of years ago would spawn demand from the spinning industry for suspension of the existing 6.5 per cent duty on imported synthetic fibre to meet their requirements.

“It is really very difficult for any one to justify the duty on PSF imports in view of substantial shortfall in domestic cotton crop this year and decrease in local production of the synthetic fibre,” an official conceded.The NTC had imposed punitive duties up to 12.5 per cent on all foreign suppliers of PSF, who did not contest the case because of the small size of Pakistani market in response to a complaint of “injury” launched by local manufacturers of synthetic fibre.

Only one Chinese supplier, who responded to the notice, was spared of the punitive duty.

The decision was overturned by the court when the Aptma challenged it on the grounds that the committee that had decided the case was incomplete. The matter was again referred to the NTC for a review.

However, the Aptma has again gone to the court, pleading that the NTC should issue fresh notices to all suppliers who had been punished by its earlier decision. The spinners argue that the anti-dumping action against foreign suppliers had resulted in increase of price of imported fibre because now they were dependent on only one Chinese supplier.

The situation worsened when a major local manufacturer, Dewan Salman Fibres, closed down it operation, increasing the gap between demand and supply of the fibre by an additional 12,000 tons a month. Since then, the local PSF production has come down to 18,000-20,000 tons a month against a demand of 30,000 tons.

Taking advantage of the situation and tariff protection of 6.5 per cent the local producers were also selling their product to the industry at 15 to 20 per cent higher price than its offered f.o.b. prices anywhere in the regional market, spinners claimed.

In a meeting with the textile minister last month, the spinners demanded that the government withdrew anti-dumping as well as import duties on PSF in view of the current domestic shortage of four million bales of cotton and reduced local supply of the synthetic fibre.

Agreeing to the spinners’ demand, Textile Minister Rana Farooq Saeed called a meeting of representatives of Aptma and PSF manufacturers on Jan 14, and asked the latter to withdraw the complaint to ease difficulties of the spinners.

The Aptma is expected to raise the issue again with the ministry and demand suspension of import duty on PSF. The Aptma spokesman said if the government wanted to increase textile exports it must take action to allow duty-free import of PSF.

It is interesting to note that while import of PSF is subject to duty polyester yarn can be imported duty-free. “It is like supporting jobs in our rival economies at the cost of our own people and industry,” the spokesman argued.