FAISALABAD, Dec 6: The continuous speculation business in the local cotton yarn market and unprecedented hike in prices of cotton yarn and phutti have resulted in closure of over 25,000 powerlooms in the city.

During a survey of the industrial areas — Nisar Colony, Samanabad, Faizabad, Akbarabad, Dogranwan Road, Ali Town, Sargodha Road, Punj Pulian, Muneerabad, Sohailabad and Bauwala — it was observed that hundreds of powerloom units had been closed down by their owners owing to what they claimed continuous loss.

Scores of daily wage earners were seen sitting idle outside the factories. They claimed they had no alternative job. Powerloom owners claimed they had been left with no option but to close their units because of escalating prices of cotton yarn. They were not getting orders from exporters for supply of grey-cloth and other products.

It was also noticed that new exporters and small powerloom owners were the worst hit. Those who had a chain of business on the terms of purchase of yarn on behalf of their foreign buyers are also seen in hot waters owing to uncertainty in the cotton yarn market.

Those exporters who had resources to purchase yarn to fulfil their export consignments could only survive in this situation. However, over 80 per cent exporters used to purchase cotton yarn on day-to-day basis and they have been facing innumerable problems in the wake of present unprecedented increase in the prices of cotton yarn.

Meanwhile, the local cotton and yarn market is in the grip of heavy speculation business activities for the last couple of months. Rates of almost all the yarn brands and counts have gone up by Rs10 to Rs15 per bundle during the last one week, which is an unprecedented hike for the last one decade.

The business activities of selling and buying are said to be a high peak. But virtually the entire market has gone in the hands of speculation mafia, which after almost 15 years, was seen in action owing to sudden rise in the cotton prices.

Market sources revealed that rates of cotton yarn had gone beyond the reach of exporters due to the record increase during the one decade as compared to renowned foreign brands of cotton yarn. The actual buyers are out of the market and the entire transactions are being done by the speculation mafia.

Office-bearers of the All Pakistan Cotton Powerlooms Association, the All Pakistan

Cloth Exporters Association, the All Pakistan Sizing Industries Association and the Pakistan Hosiery Manufacturers Association have feared that in case appropriate steps for controlling cotton yarn prices were not taken, the local exporters would lose scores of contingents and orders from foreign buyers.

They said that after increase in prices of cotton yarn, a number of small powerloom units had reached on verge of closure because the exporters were not in a position to purchase cotton yarn from the market at heavy prices to fulfil their export orders.