Pakistan : Garment Exporter Urged EPB Not To Auction Quota

The readymade garments exporters have urged the Export Promotion Bureau (EPB) not to auction quota of over one million pieces of category-6 (trousers , shorts for the EU) until a decision is taken by the government to release the withheld over-programming quota to them.

The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) said it was assured by the commerce minister, Mr Humayun Akhtar Khan, in a meeting that the cat-6 quota deducted to the extent of 13.5 per cent would be allowed as "over-programming" in 2002 from entitlement of exporters admissible in 2003 and would be released no sooner than the (actual) verification of the shipments of 2002 was completed.

In view of this, PRGMEA said, the auction of the category- 6 quota should be withheld until a final decision was made on the release of the deducted quota.

The quota prices (per piece) in cat-6 are said to have registered a record increase since January due to uncertain conditions prevailing in the market on the availability of special flexibility and over- programming quota to exporters.

The exporters claim that they had been told by the EPB at the start of the year that 7.82 per cent special flexibility quota as well as 15 per cent over-programming would be deducted from their entitlement for 2003 on the basis of the calculations of quota utilized (by them) in 2002.

"The exporters are acquiring the quota to meet their orders at higher rates from the open market," the PRGMEA officials told.

It's for the first time in several years that over-programming quota was being deducted from their entitlement, added the PRGMEA officials.

When contacted, PRGMEA Chairman Pervez Hanif said the delay in a decision to release over-programming quota had squeezed margins of the exporters. He said only few big exporters could afford to buy quota on such high prices.