Textile exports fall 14pc
Mubarak
Zeb Khan
ISLAMABAD: Pakistan’s textile and clothing exports witnessed
a decline of 14 per cent in October this year over the same
month last year, sending fears to policy-makers that
shrinking export proceeds in the sector may result in
layoffs.
No official word came from the ministry of industries over
this sudden fall in export proceeds, which had recorded an
impressive growth last year because of rising cotton prices
in the international market.
Pakistan’s exporters are capable of marketing around $1.021
billion worth of textile and clothing products in October to
international market against $1.181 billion last year,
reflecting a decline of 13.51 per cent, suggests data of
Federal Bureau of Statistics here on Monday.
A sector-wise analysis shows negative growth in export of
raw cotton, cotton yarn, cotton cloth and cotton carded and
value-added finished products, like garments, knitwear, bed
wear and towels.
The only area, where some impressive growth was recorded was
in export of yarn other than cotton yarn and tents during
the month under review over last year.
However, over-all growth in textile and clothing in the past
four months posted 3.29 per cent growth, as it reached
$4.207 billion in July-Oct this year from $4.073 billion
over the corresponding period last year.
But if no remedial measures were taken, over-all exports
would enter a negative growth in the months ahead, which
could cause balance of payment problem for the country.
At the start of this year, former chairman of All-Pakistan
Textile Mills Association Gohar Ijaz had claimed that the
textile and clothing exports could touch the figure of $20
billion by end June 2012. But he conditioned it with energy
supply and reduction in interest rates.
This projection came on the back of last year’s impressive
growth in textile and clothing sectors, which reached around
$15 billion by the end of June 2011. This growth, however,
was mainly driven by the rise in cotton prices in the
international market.
At the same time, there was a significant decline in import
of machinery in the value-added sector to increase quality
and capacity of production.
Statistics shows that textile machinery imports declined by
34 per cent in October and 23 percent in July-October this
year over the last year, reflecting that the industrialists
have no plan for expansion of their industrial units in the
current year.Contrary to growth in textile and clothing,
export of traditional products or non-textile products
increased by 25 per cent to $3.65 billion during the
July-Oct period of the current fiscal year as against $2.92
billion in the corresponding period last year.
Nasir Jamal adds from Lahore: The quantitative decline in
Pakistan’s textile exports in the first four months of the
current fiscal year to October from a year earlier is
proportionate to the increase in the curtailment of gas
supply to the industry in Punjab during the same period.
“The quantity of the textiles exported during July-October
showed a drop of 12 per cent. It is proportionate to 14 per
cent increase in gas curtailment for the industry,” says
Gohar Ejaz, a business leader, while talking to Dawn on
Monday.
Growing gas shortages in Punjab have resulted in three days
a week suspension in supply of the cheap fuel to textile
industry during the first four months of this fiscal year
from two days a week during the same period last year.
Overall the industry has experienced gas supply suspension
for 120 days during March-October.
“The gas shortages for the industry have made the industry
uncompetitive in the international markets,” says Gohar who
is former chairman of All -Pakistan Textile Mills
Association (Aptma).
The textile exports have also decreased in terms of their
dollar value by 14 per cent to $1.02 billion, he says,
quoting the latest trade data released by the Federal Bureau
of Statistics.
“We are working under extreme pressure,” he adds.
He points out that China, India and Bangladesh have been
supporting their textile industry in view of the economic
slowdown in Europe and the United States. “India, for
example, is providing five per cent interest rate subsidy to
its industry to facilitate fresh invest.
On the other hand, we have to borrow money at a much higher
rate and also face more than 40 per cent gas shortages. How
will our industry survive in such conditions?,” he asked.
Gohar linked the decline in domestic and foreign investment
to growing energy shortages in the country as well as to
high cost of borrowing.
“Instead of making fresh investments, the businessmen are
retiring their existing loans to cut their financial costs.
The non-performing loans have risen to Rs629 billion,
increasing by Rs150 billion in a year, as factories are
closing down because of gas cuts,” he says.
He urged the government to save the textile industry as it
is the last hope of the country.
In the meanwhile, Petroleum Minister Dr Asim Hussain
reassured Aptma four days a week gas supply during winter
and further up-gradation to five days a week once new gas
finds are in place during next three months.
Talking to Gohar Ejaz, former Aptma chairman and other
leaders, including Mohsin Aziz, Aptma chairman, and Ahsan
Bashir, Punjab-Aptma chairman, the minister made it clear
that the government has planned gas curtailment to power
plants, and not textile industry, for uninterrupted gas
supply to fertiliser plants.
Courtesy: The DAWN
