Pakistan's government has imposed ceiling of 50,000 tons per month on the export of cotton yarns from the country. The ceiling will be effective from 1st January 2010.

In addition the government also announced a 2% cash rebate on cotton yarns sold to the domestic downstream textile industry for value addition.

The move comes after ready-made garment makers held widespread protest rallies against ongoing price hikes and the shortage of cotton yarns in the domestic market - and threatened a mass closure of all factories unless an export ban was imposed.

Pakistan's cotton yarn exports jumped more than 50% to 63,000 tons during the month of December 2009.

Gohar Ejaz, chairman of the All Pakistan Textile Mills Association (APTMA) in Punjab, told just style that the quota restrictions on the exports of cotton yarn are against the mechanisms of a free market.

He said the government should instead focus on providing an uninterrupted supply of electricity and gas to the textile industry rather than imposing bans on the textile exports.

Former central chairman of the Pakistan Garment Manufacturers and Exporters Association (PRGMEA), Ijaz Khokhar, welcomed the quota restrictions, however.

He told just-style the decision would allow the country to meet its textile export target of US$25bn by the year 2015.