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The SBP’s export numbers for the month of April once again reflect what has already been said; textile exports continue to suffer amid low demand and depressed international cotton prices, higher production and labour costs, energy shortages, cut throat competition from regional competitors such as India, and a further lack of competitiveness on the back of an overvalued Rupee.
For the month of April, textile exports slid six percent year-on-year and nine percent over the preceding month. Component-wise, raw cotton saw the largest dip of 73 percent year-on-year. However, cotton yarn stayed flat year-on-year, as did readymade garments.
One major problem is that Pakistan’s textile value-added sector isn’t all that developed. Textile happens to be an industry with the longest production chain, with inherent potential for value addition at every stage (the Ministry of Textile said so itself in its Textile Policy 2014-2019).
Articles of cotton form a near 81 percent of all textile exports. Of these, the value-added segment (knitwear, bed wear, and readymade garments) makes up around 60 percent, while the basic segment (raw cotton, cotton yarn, cotton cloth) makes up the rest. This division might not be conducive to growth; spinning and weaving keep on taking a beating. Since the basic textile sector is failing to compete, maybe it’s time to shift some of the eggs into the value-added basket. At the very least, the margins will be better.

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