Textile industry likely to miss export target

Due to severe energy shortage, textile industry of the country is likely to miss export target by dollars four billion during the current year, sources revealed. Informed sources revealed that textile export target of dollars 14 billion was estimated for the current year; however exporters fear a shortage of 30 percent ($4 billion) in textile exports this year due to severe energy shortage.
Pakistan Apparel Forum Chairman Javed Balvani told Business Recorder that textile exports were likely to be no more than dollars 10 billion during the current year as compared to dollars 14 billion in the preceding year. He said that about 50 percent textile export was covered by Punjab and 50 percent by Sindh, however due to electricity and gas load shedding for last eight months in Punjab and two months in Sindh, the export target would be missed.
Gohar Ijaz, former chairman All Pakistan Textile Mills Association (APTMA), said that "textile production is likely to decline by 30 to 35 percent due to three days of gas load shedding a week. Last year textile sector faced gas load shedding for two days a week, however during the current fiscal year 2011-12, it is being curtailed for three days that could results in considerable reduction of textile exports, said Ijaz, adding that about 80 percent of the industry (3200 units) located in Punjab were the main sufferers.
He said "obviously the foreign importer whose export order is not filled within a specific time period would divert his order to another country like India and Bangladesh next year. That is why every year, the country loses export orders worth millions of dollars and this issue is still unsolved due to government's negligence in realising that the textile industry, the major foreign exchange earner of Pakistan, is being forced to operate at well below capacity due to gas shedding".
According to the estimated target, the country will have 12.59 million bales cotton production this year. The local industry has the capacity to absorb 14 -15 million bales but due to energy crisis, the industry would be unable to utilise around two million bales of cotton and it would be exported this year against 0.7 million bales of last year. This will negatively affect the value added textile exports.
According to the documents available with Business Recorder, the export volume of cotton yarn declined by 10.5 percent in the first seven months of the current fiscal year with quantum of cotton yarn exports decreasing from 324.9 million kg in 2010-11 to 290.7 million kg in 2011-12.
Cotton cloth export in terms of volume declined by 15 percent in the current fiscal year with quantum of export dipping from dollars 1,185 (M.sq.mtr) in 2010-11 to dollars 1007.1 (M.sq.mtr) in 2011-12; however, the increase in terms of value was higher comparable to previous year with total cotton cloth exports going up from dollars 1,331 million last year to dollars 1,334 million in the outgoing fiscal year because of 18 percent increase in price per unit. The price of per unit cotton cloth increased from dollars 1.12 in 2010-11 to dollars 1.33 in the international market.
The export quantity of readymade garments declined by 21 percent during the first seven months of the current fiscal year with total volume decreasing from 19.4 million dozens in 2010-11 to 15.4 million dozen in 2011-12 but the total value of export on account of price per unit increase went up from dollars 937 million for the same period of last year to dollars 945 million in the current fiscal year. The export quantity of hosiery also declined by 23.7 percent during the first seven months of the current fiscal year but an increase of 19.7 percent in price per unit has helped partially counterbalance the impact of volume decline.