KARACHI: Pakistan’s textile and clothing exports recorded 9.47 percent year-on-year decline to $1.088 billion in March 2019, taking the nine-month (July-March FY19) exports to $9.99 billion, as higher cost of doing business and economic uncertainty limited the industrial expansion.[the_ad id=”31605″]“This is the largest monthly decline in textile exports since May-2017 and it should also be noted that during that previous instance the drop in textile exports (-12%) owed to external factors i.e. transporters’ strike,” Ahmed Lakhani at JS Global Capital said.
On month-on-month basis, textile sector exports recorded a decline of 0.12 percent in March compared with $1.09 billion recorded in February 2019, the Pakistan Bureau of Statistics (PBS) reported.
Senior Vice President FPCCI Mirza Ikhtiyar Baig said the policy of higher interest rates had backfired as there was no respite in inflation, but industrial investment had slowed down as no industrialist could afford to expand at the prevailing interest rates. Moreover, the currency devaluation also proved counterproductive as the exports did not pick up despite 34 percent devaluation since January 2018.
It may be mentioned here that around Rs400 billion of exporters’ claims are stuck up with the government causing severe liquidity crunch while the Rs80 billion worth of promissory notes against sales tax refund claims, as announced by the finance minister, have not been issued as yet.
In March, cotton yarn exports decreased 28.23 percent year-on-year to $91.919 million; knitwear exports declined 6.48 percent to $215.28 million; bedwear exports decreased 3.63 percent to $189.234 million; readymade garments exports slipped 3.42 percent to $214.915 million while cotton cloth fetched $185.55 million in March, down 3.42 percent over the same month a year earlier.
“During March 2019, every major textile segment witnessed a decline in exports. The dismal performance during this month can mainly be attributable to declining textile imports by China, Pakistan’s major yarn customer, whereas a fall in global demand and higher local sales were also likely causes of the decline during the month,” Lakhani said.
However, recent statements by the country’s policymakers suggest optimism that exports are expected to show a resurgence in the next 1-2 months, which also conveniently coincides with the ongoing China-Pakistan Free Trade Agreement-II and the upcoming Federal Budget in May-2019.
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.”