Tag: textile sector

  • Pakistan’s textile exports dip 6% in August 2023, posing economic challenges

    Pakistan’s textile exports dip 6% in August 2023, posing economic challenges

    Pakistan’s textile sector has experienced a continued decline in exports, with provisional data released by the All Pakistan Textile Mills Association (APTMA) indicating that in August, exports reached $1.48 billion, down by 6 per cent compared to the same month in the previous year when they stood at $1.58 billion.

    Moreover, the data reveals that Pakistan’s textile exports for the first eight months of the calendar year 2023 have seen a significant drop of 19 per cent, totaling $10.58 billion, as opposed to the $13 billion recorded during the equivalent period in 2022. This year-on-year decline raises concerns for Pakistan’s economy, especially in light of its foreign exchange shortage, which has already led to a depreciation of the rupee by more than 25 per cent in the inter-bank market since the beginning of 2023.

    However, there is a glimmer of optimism as monthly figures indicate a 13 per cent improvement in textile exports, rising to $1.48 billion in August compared to $1.31 billion recorded in July.

  • Pakistan’s merchandise exports dive for ninth consecutive month, drop by 16.69% in May

    Pakistan’s merchandise exports continue to decline for the ninth consecutive month, plunging by 16.69 per cent year-on-year to $2.18 billion in May, according to data released by the Pakistan Bureau of Statistics.

    The downward trend has persisted throughout the first 11 months (July to May) of the 2022-23 fiscal year, with exports experiencing a dip of 12.14 per cent to $25.36 billion compared to $28.87 billion during the same period the previous year.

    The decline in export proceeds can be attributed to a combination of internal and external factors, raising concerns about the potential closure of industrial units, particularly within the textile and clothing sector.

    In line with this, imports also experienced a significant decrease of 36.76 per cent to $4.27 billion in May compared to $6.76 billion in the corresponding month last year. From July to May, imports fell by 29.22 per cent to $51.15 billion, down from $72.28 billion during the same period last year.

    The government has implemented restrictions on luxury and non-essential goods while promoting imports of raw materials, semi-finished products, pharmaceuticals, food, and energy products. This policy shift has resulted in a substantial decline in the import bill over the past 11 months.

    As a result of these developments, the trade deficit has narrowed by over 40 per cent, reaching $25.79 billion between July and May of the fiscal year 2022-23, compared to $43.40 billion during the corresponding months of the previous year. In May, the trade deficit saw a year-on-year decline of 49.49 per cent to $2.08 billion.

    According to Dawn, the textile and clothing sector, which constitutes over 60 per cent of total exports, has been severely affected, making it challenging for the government to achieve its export target for the current fiscal year. Exporters have pointed out that the federal government lacks a clear strategy and effective prioritization, leading to a decline in textile exports.

    Exporters have also highlighted several root causes contributing to the export decline. These include shortages in working capital and liquidity, delayed refunds of taxes and levies, technology upgradation fund, and duty drawbacks.

    The promised faster refund system has not functioned as intended, resulting in refund processing times of 3-5 months instead of the expected 72 hours. The sector is also grappling with increased financial and energy costs.

    In addition, exporters are facing challenges in procuring raw materials and other inputs, both domestically and through imports. The State Bank of Pakistan’s hurdles in opening letters of credit have further contributed to the decline in exports.

    The negative growth in exports, except for a slight increase in August due to backlog clearance, poses a significant concern as it threatens the balance of the country’s external account.

    The government needs to address these issues promptly and formulate effective policies to revive the export sector and stimulate economic growth.

  • Pakistan’s textile industry struggles as exports fall by 28% in February

    Pakistan’s textile industry struggles as exports fall by 28% in February

    On Monday, the All Pakistan Textile Mills Association (APTMA) released provisional data indicating that Pakistan’s textile sector exports declined significantly by 28 per cent, totaling $1.2 billion in February 2023, compared to $1.67 billion in the same month the previous year.

    Additionally, APTMA reported that textile exports for the first eight months of FY23 decreased by 11 per cent to $11.24 billion, down from $12.60 billion in 8MFY22. These declines are alarming for Pakistan, whose economy is already struggling with depleting foreign exchange reserves.

    The country’s central bank has only $3.81 billion in reserves, which is barely enough to cover a month of imports.

    Industrialists in Pakistan have expressed concern about the ongoing slump in the textile sector. Data released by the Pakistan Cotton Ginner’s Association (PCGA) on Friday revealed that cotton arrival in Pakistan also decreased by 34.5 per cent year-on-year.

    Last month, APTMA urged the federal government to implement a uniform gas price of $7 per MMBtu for the export industry throughout the country to ensure a level playing field.

    APTMA also warned that the government’s decision to suspend the regionally competitive energy tariff (RCET) of electricity for Export Oriented Units (EOUs) would harm the textile industry, particularly in Punjab.

    In December, APTMA wrote a letter to Prime Minister Shehbaz Sharif, warning that the country’s textile exports could fall below $1 billion a month from 2023 onwards, highlighting a range of issues affecting the sector, which is currently operating at less than 50 per cent capacity utilization.