APTMA says Pakistan's textile exports to suffer decline in July

Pakistan's textile exports in July are expected to suffer a major dent, and may drop to $1.5 billion, stated the All Pakistan Textile Mills Association (APTMA), the trade organisation that represents the country's largest industrial sector.

Taking to social media, the association, while sharing tweets of Asad Naqvi, a senior research analyst at APTMA, said provisional data shows that textile exports stood at $1.16 billion for the first 25 days of July.

“Expected full-month textile exports approximately $1.5 billion,” said Naqvi. This amount would be 17% lower than $1.8 billion textile exports recorded in June.

Naqvi blamed the decline on the severe energy supply issues.

FY21-22: Textile group exports witness 25.53pc growth

The development comes just weeks after APTMA urged authorities to restore gas and RLNG supply of the export-oriented industry on an urgent basis, stressing that a loss of almost $1 billion in exports would take place, resulting in further damage to the economy.

Pakistan’s textile sector accounts for a major share of country’s exports, which are vital for the cash-strapped economy. As per the State Bank of Pakistan (SBP), the textile group exports registered an increase of 17.2% on a month-on-month basis as they reached $1.802 billion in June 2022 compared to $1.537 billion in May 2022. Textile exports witnessed 23.5% growth on a year-on-year basis as compared to $1.459 billion in June 2021.

Pakistan suffers from low foreign exchange with policymakers mostly scrambling to ensure dollar inflows. In such an environment, many experts have stressed on exports, especially in a rupee-depreciating environment.

On Friday, APTMA, in a statement, had also warned that Pakistan is on the brink of economic collapse.

“With depleting foreign currency reserves, rising inflation, the exchange rate in free-fall and irrationally high interest rates, the country is headed towards a path similar to the economic downfall of Sri Lanka,” APTMA said in a release.

The textile organisation called for political stability and consistent policy implementation, terming both crucial for economic growth and for the export sector to thrive and contribute dollar earnings to stabilise the balance of payments for a sustainable economic outlook.

APTMA also expressed concern over the exchange rate. “The exchange rate instability has significant negative relationship with sectoral exports of Pakistan such as textile. A negative indication indicates that a rise in relative price is to blame for the decline in export demand.