The textiles number released earlier in the week by the PBS indicate broad based growth in textile exports for Sep-17. Room for some cautious optimism continues to be provided by the spur in value added segments such as knitwear, bedwear and readymade garments. The trend has certainly been positive for these categories over the past several months as well.
Compared to Sep-16, exports for the previous month picked up by 12 percent on a year-on-year basis. There was double-digit growth in cotton yarn, garments and knitwear. The growth in various segments could be attributable to implementation of some of the assurances made in the PM textile package.
The government has also tweaked the export package recently, which has allowed 50 percent of the drawback to be exempt from the condition of 10 percent incremental increase in exports. This column will comment upon the revised textile package in the coming week.
Some relief in pending sales tax refunds has managed to help exporters with their order processing and liquidity needs. But industry players still emphasize the need to make refunds in a prompt manner, which is crucial for their long term financial viability.
There has also been better provision of utilities to the industry as compared to the previous year that has allowed more export orders to be processed. Going forward, industrial load shedding will need to be completely eliminated to allow textile units to maintain the traction that they seem to have started building.
Other factors that continue to bridle textile exports are the rising cost of doing business and an overvalued rupee. Yet, there are still more deep-rooted issues in place that include evolving consumer preferences in international textile markets. The SBP has also recently highlighted the need for local players to shift from cotton-based to man-made fibres. (Read: “Textile: Evolving consumer preferences” published 17 Oct, 2017)
This column has also been stressing the need to rethink export dynamics in rapidly changing global trends. As things stand right now, oil-based synthetic fibres have the lion’s share of 60 percent of the world fibre market, whereas cotton’s share is about 25 percent. Other than the cost of raw material, technological advances in synthetic fibres offer textiles that are of better quality and have better moisture absorbency than cotton.
Therefore, to really boost exports requires the government to implement the incentive package in letter and spirit, whereas the private sector also needs to take heed from the changing consumer preferences. Unless this is done, our product range will slowly become obsolete, especially when it comes to value added segments.
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