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Textile industry likely to miss export target by $3.5bn

textile--TAHIR AMIN

ISLAMABAD: Pakistan’s textile industry is likely to miss export target by 3.5 billion dollars due to power and gas crisis, it is learnt.


Gas supply to the industry is completely cut off since December last year, while only 14 hours power is being supplied to the industry, which has affected 33 percent capacity of textile industry, industry sources revealed to Business Recorder here on Friday.


Textile exports target of 16 billion dollars was estimated for the current year; however exporters fear a shortfall of 3.5 billion dollars in textile exports this year due to severe energy shortage. The industry has already faced a loss of 1.5 billion dollars in Christmas orders as exporters declined to accept about 50 percent orders due to their inability to produce because of the power and gas cuts.


Due to excessive load shedding, the textile industrialists are finding it difficult to complete the textile export orders in time. Resultantly the foreign buyers are diverting export orders to neighbouring countries, inflicting  huge loss to the county’s foreign exchange earnings, sources maintained.


More than 15-20 percent textile export orders of Pakistan were diverted to Bangladesh, India and Sri Lanka last year, however the situation may further worsen in the current year due to gas and electricity load shedding.


Talking to Business Recorder, Gohar Ijaz of All Pakistan Textile Mills Association said that on December 21, the Ministry of Water and Power disconnected power supply to all large-to medium-scale factories of Punjab for an indefinite period of time, where 80 percent textile industry of the country was located.


After the intervention of Prime Minister Raja Pervez Ashraf and President Asif Ali Zardari, the Ministry of Water and Power restored power supply to the industry only for 14 hours, while gas has remained disconnected since December last year. Due to gas supply cut and power outages, the industry suffered a loss of 500 million dollars during this period.


He further said the President had directed the Ministry of Water and Power to restore power supply on three shifts per day basis, to the affected industrial units by the first week of February 2013, but uncertainties prevailed in the industry.


Recently in a letter by the Ministry of Textile Industry sent to the Ministry of Water and Power and Petroleum and Natural Resources, it was revealed that textile industry of the country registered a huge loss of Rs 200 billion each year for the last four years, due to power and gas shortage. The energy suspension would also disable Pakistan from fully utilising the European Union preferential trade deal, senior officials of the Textile Ministry and industry’s sources revealed.


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Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-2.197 bln
Exports $1.729 bln
Imports $3.926 bln
WeeklyNovember 23, 2015
Reserves $19.713 bln