Pakistan’s textile exports remain flat at $1.14 billion in December

Pakistan’s textile exports remain flat at $1.14 billion in December

KARACHI: It seems the charm of textile sector exports has ended. Pakistan’s exports, largely dependent on textile and clothing products, have been on downward trajectory for some time, and even before that textile exports did not observe sustainable growth. Pakistan will not be able to compete with competitors like China, Bangladesh, Vietnam, India and Turkey; not in terms of prices and quality. Cost of production is higher in Pakistan, there is no dependable utilities supply system, there is hardly any research and development. It is beyond time Pakistan seriously finds new markets for unconventional products. Pakistan’s textile and clothing exports recorded a meager 0.68 percent year-on-year surge to $1.139 billion in December 2018, taking the six-month (July-December FY19) exports to $6.645 billion up 0.06 percent, as rupee devaluation failed to push exports in the absence of utilities for the industry. Chairman Pakistan Apparel Forum (PAF) Zubair Motiwala said had there been no rupee devaluation, exports would have plunged significantly. “This is the only benefit currency devaluation brought for the export sector.” On month-on-month basis, textile sector exports recorded a growth of 28.19 percent in December compared with $1.1 billion recorded in November 2018, the Pakistan Bureau of Statistics (PBS) reported on Wednesday. Motiwala said that the cost of production was higher in Pakistan as compared to regional competitors, which had limited the market for Pakistani products in the world. “Industry in Karachi was deprived of gas for 16 days in December alone. Karachi contributes 52 percent of the total exports and if this industry doesn’t get the gas, how can we expect to increase exports.” In December, cotton yarn exports decreased 29.74 percent year-on-year to $75.76 million; knitwear exports rose 10.2 percent to $260.39 million; bedwear exports increased 9.08 percent to $193.11 million; readymade garments exports surged 3.59 percent to $238.119 million while cotton cloth fetched $172.24 million in December, down 3.78 percent over the same month a year earlier. An industrialist said Pakistan’s exports were largely dependent on imported inputs. “Fluctuation in rupee value and costlier utilities rendered Pakistan’s products uncompetitive in the international markets.” An office bearer of the Karachi Chamber of Commerce and Industry said the government did not have a long-term policy to encourage country’s exports and support the local manufacturers. “We hope the government would undertake some concrete and sustainable reforms for the export sector, as without increasing the exports, country would not be able to achieve sustainable economic growth.” Furthermore, the perennial issues plaguing the sector remain largely unaddressed, where lack of availability of system gas and costlier RLNG have forced several smaller mills to close operations, another negative for textile exports for the year. Finally, analysts believe that while spinners will be able to pass on at least some of the additional cost burden due to demand for yarn in local markets, it will be more difficult for value-added goods’ manufacturers to increase prices in their predominant export markets. “We expect the performance of textile sector to remain upbeat in the coming months owing to Govt’s commitment towards the improvement of the sector. The expected decrease in duties on raw material, concessionary gas and electricity prices along with the withdrawal of duties on imported cotton would likely to have positive impact on country’s textile exports. Furthermore, we expect the impact of rupee depreciation to start reflecting from 2HFY19 as the its impact usually comes with a lag. Furthermore, as per news flows Pakistani firms received good response at recently held Heimtextil 2019, as the sector related developments have enhanced competitiveness of Pakistani products internationally.” Taimor Asif at Pearl Securities said.
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