Over 15-20pc textile export orders diverted to Bangladesh, India, Sri Lanka

ASMA RAZAQ & TAHIR AMIN

ISLAMABAD: More than 15-20 percent textile export orders of Pakistan have been diverted to Bangladesh, India and Sri Lanka during last one year due to gas and electricity load shedding.

Sources told Business Recorder here on Tuesday that due to excessive load shedding, textile industrialists are finding it difficult to fill textile export orders in time. Resultantly, the foreign buyers are diverting export orders to neighbouring countries, inflicting huge loss to the Pakistan.

"The textile industry has been suffering severely from the day by day increasing load shedding of electricity and gas. The textile industry is the major foreign exchange earner in Pakistan which is currently going through a very critical phase of history", sources said.

The industry is dependent on availability of cotton, which has been damaged due to recent floods. Almost 74 percent cotton crop has been damaged in Sindh with 1938,000 tons production losses, against the initial estimates of about 2614,000 tons of output. Cotton was sown on 1634,000 acres of land while 1211,000 acres of crop area was destroyed.

Cotton is Pakistan's main cash crop, contributing 1.4 percent to GDP. Fiscal year 2011-12 is the second year when the crop has suffered as cotton output fell to 11.70 million bales against a target of 14 million bales due to 2010 devastating floods.

Sources said that smaller cotton crop would have negative implications on the value-added sector. Last year, too, yarn shortages and extremely high prices of cotton yarn led to lower than expected foreign exchange earnings.

Despite the recent floods in lower Sindh, which caused great loss to cotton crop, the country is still likely to achieve 12-12.5 million bales during the current fiscal year 2011-12. That would be more than last year's production.

"We will have to import 1.5-2 million bales of cotton this year from neighbouring countries like India, China etc to meet domestic requirements", sources said.

They said: "Due to day by day increasing electricity and gas tariff, the overall cost of production of textile items is increasing with each passing day. We have to pay 12 cents per unit for electricity while in Bangladesh it is 7 cents/unit. Similarly, in Pakistan the industrialists have to pay 16 cents per cubic metre of gas while in Bangladesh it is 7 cents/cubic metre. Also in Bangladesh, 10 percent cash subsidy is granted to textile industrialists in local purchase of textile goods. Almost 50 percent textile export orders are booked from Karachi and everyone knows about the worsening law and order condition of the city. New prospective foreign buyers of our textile items hesitate to book orders from Pakistan. They prefer neighbouring countries like India and Bangladesh rather than Pakistan."

Sources in the Textile Ministry said that the government is unlikely to extend any support to the farmers. Crops come under the jurisdiction of Agriculture Ministry, which is being transferred to the provinces under the 18th amendment.

However, it is expected that Prime Minister and President will announce some subsidies on pesticides and seeds.