Factory owners from Mahallah, who are experiencing a severe dearth of raw materials, have given an ultimatum to the government that if it fails to respond to their demands to stop raw cotton exports and waive export assistance for yarn by May 8, they would shut down their units.
According to a member of a trade body, the dearth and hike in prices of raw materials are putting heavy pressure on the factories.
Ministries of Industry, Labour, Agriculture and Finance convened a meeting with these producers in Mahallah al-Kubra on behalf of government to discuss the issue, after these factories threatened to go on strike.
Abu Qamar underlined that curbing cotton exports would boost yarn supply for factories in Mahallah. He pin-pointed that, several other countries have also initiated similar steps to safeguard their domestic industry.
He said that, the government extended assistance to the yarn exporters to the detriment of domestic industry, and added that, when the local industry is facing severe scarcity of raw materials, investing LE75 million to aid cotton exports is not interest of domestic industry.
The factory owners, while in a meeting with the Ministry representatives charged the Holding Company for Cotton, Spinning and Weaving of causing the yarn prices to rise in the local markets, in spite of a 10 percent fall in world prices.
However, the Holding Company refuted these charges and demanded constitution of a committee of manufacturers for a comparative analysis of cost and sale prices.
The Holding Company declined to provide any assurance regarding reduction in prices, as he said that, any decrease in prices would cause the company to suffer significant losses.
Fibre2fashion News Desk - India
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