Pakistans textile may have increased 6.5 percent year on year during 10M FY14 but month-on-month figures showed a drop of nearly 15 percent in April 2014. The month on month comes as a consequence of negative growth in quantities exported across the majority of textile categories.
Unprecedented fall in textile exports, according to the member of Pakistan Textile Exporters Association (PTEA), is attributable to the fact that Punjab-based textile mills are suffering from 8 hours a day of electricity outages and 16 hours a day of gas load shedding. In addition to that, textile mills in Punjab have been strained with Rs80 billion additional costs per year because of tariff differential, as the industrial tariff last year increased to Rs9 to Rs14.5 per unit, whereas in other provinces it is Rs7 per unit.
Additionally, the international environment is not currently favourable for Pakistans textile exports as global economic conditions have not improved much in the current fiscal year. According to the latest OECD quarterly data, growth in the 34 advanced democracies edged back to 0.4 percent in the quarter ended March 2014 compared from 0.5 percent in the same period of last year, especially in the broader 28-member European Union where growth slowed to 0.3 percent from 0.4 percent in March 2013.
However, a member from All Pakistan Textile Mills Association (APTMA) was pleased with the growth during the 10M FY14 period. He expressed that the business community involved in the textile sector is importing textile machinery to increase its production capacity as to capitalize the GSP+ facility awarded to Pakistan by EU. Textile machinery import rose by 59.7 percent during 10M FY14. But the effect of rapid appreciation of rupee against the dollar did not trickle down to the cost of doing business, which has slackened the pace of growth.
Currently, the textile ministry is at work on drafting a new textile policy for the year 2014-19 with support schemes of more than Rs80 billion claiming that the exports from this sector will increase to $26 billion by the end of 2019. However, textile exporters are stressing the government to take cognizance of serious matter to tackle with challenges like energy crisis, high interest rate and liquidity crunch, which is holding this mainstay of national economy back from producing exportable surplus.
====================================================================================
Textile exports ($ 000)
====================================================================================
10MFY14 chg Value Quantity
Apr-14 MoM chg Apr-14 MoM chg
====================================================================================
Raw cotton 196,074 41.8% 14,175 -24.7% 7,546 -23.64%
Cotton yarn 1,708,112 -8.2% 134,102 -26.9% 45,524 -25.84
Cotton cloth 2,346,839 5.5% 220,283 -12.0% 130,158 -8.42
Knitwear 1,842,110 10.7% 174,331 -5.5% 11,442 8.48
Bedwear 1,767,333 20.4% 159,920 -13.6% 22,783 -13.66
Towels 624,495 -3.2% 60,004 -18.4% 14,625 -13.46
Readymade garments 1,580,763 7.5% 151,775 -13.1% 2,466 -13.72
Textile group 11,437,585 6.5% 1,054,866 -14.6% - -
====================================================================================
Source: PBS
Comments
Comments are closed.