The plunging textile exports belie the PML-N government's claims of the GSP plus facility would turn the country's economy around with a $2 billion immediate jump. Nearly all textile exports nose-dived, except the towel and readymade garments one showing a growth of merely 4.17 percent ($10.712 million) and the other 4.10 percent ($26.8 million), respectively in July-October 2015-16.
"The GSP plus, which was introduced in January 2014, has utterly failed to give even a slight boost to the existing textile exports," Central Chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Ijaz Khokhar told Business Recorder on Friday. Overall textile exports, in the first four months of current fiscal year, scaled down by 7 percent $316 million to $4.271 billion from $4.587 billion in the same period last fiscal year, Pakistan Bureau of Statistics (PBS) said.
Quantity of towel export also mounted by 7.07 percent or 3, 758 metric tons to 56,948 metric tons in July-October 2015-16 from 53,190 metric tons in the same period last fiscal year. Readymade garments export, in term of volume, however declined by 7.24 percent or 3, 071,000 dozens to 6,948,000 dozens from 10,019,000 dozens, the PBS shows.
"It is not a big growth. All will be negative in coming months," Khokhar showed disappointment over a slight increase in textile two sub-sectors, and attributed the fresh growth to the bulk apparel and home textile exports for Christmas and New Year celebrations in the US and Europe. Bed-wear export nose-dived by 8.02 percent or $58.773 million to $674.567 million from $733.340 million and volume by 8 percent or 28, 743 metric tons to 104,889 metric tons from 133,632 metric tons.
Knitwear export dipped by 2.16 percent or $18.079 million to $820.299 million from $838.378 million, and, in term of quantity, by 3 percent or 1,018,000 dozens to 36,289,000 dozens from 35,271,000 dozens. Export of cotton cloth slumped by 9 percent or $73.373 million to $761.813 million from $835.186 million, and volume by 8 percent or 52, 523metric square meters to 619,252 square meters from 671,775 square meters.
Cotton yarn export came down by 21.04 percent or $134.322 million to $504.209 million from $638.531 million and quantity by 14.37 percent or 3, 2248 metric tons to 192,193 metric tons from 224,441 metric tons. Exports of raw cotton by 10.21 percent down, cotton carded or combed by 98 percent, yarn other than cotton yarn by 23 percent, tents, canvas and tarpaulin by 49 percent, art, silk and synthetic textile by 20 percent, made-up articles by 0.17 percent and other textile goods by 2.16 percent.
"Textile exports will continue to fall in coming months once the religious celebrations in west comes to an end," the Prgmea chief said, slamming Trade Development Authority of Pakistan (TDAP) and Federal Commerce Minister for the growing trade deficit. Fearing on falling short of exports targets, he said that the federal government's preferences had been indifferent to augmenting the national trade and accumulating revenues. "Textile exports in November-December 2015 will decline and do not reflect on the national manufacturing potential," he added.
He warned the government of further decline in the exports on 'worst' global demand from December 2015 to January 2016, saying that the lean period would end somewhere by end of February or start of March next year. "Buyers will start placing orders after their stocks are sold out," he said. He termed the blocking of sales tax refund by the PML-N government to the textile sector as 'main' factor pulling down exports and hindering economic growth, saying that "if such an economic fall in a western country had happened, the entire cabinet would have been shaken up. But here no one is bothered".
He called the prime minister 'ignorant' to the country's falling exports and textile sector's crisis, failing to implement Textile Policy, provide incentives and stir up the entire cabinet to help cope with the falling economy. "TDAP role is zero while commerce minister is indifferent like prime minister," he criticised.
GSP plus is a showpiece and not more than that, he showed desperation after the facility allowing Pakistan to exports its goods to the EU markets duty-free had failed to give growth the national economy, despite the government had claimed the access would yield $2 billion immediate increase. Khokhar was unable to understand whether what had held back the prime minister to appoint a textile minister to end falling exports streak, saying that "it has been a year that there is no textile minister despite exports are falling". He said the prime minister was also unable to recognise the textile sector's liquidity crisis emerged from the government's sales tax imposition.
Cost of business is ever rising, he said, adding that the government had extended its incentives only to the spinning sector leaving the entire value-added exporting sub-sectors high and dry. "At least Rs 2 billion of value-added textile sector the finance ministry has blocked under sales tax refunds, scaling down manufacturing badly," he said. Slamming the government for 10 percent duty on import of yarn, he said that the imposition was just aimed at facilitating the spinning sector at the expense of local apparel manufacturing-cum exporting sector. The imposition failed to end yarn import as the raw material is cheaper on the global market than at home, he said, asking the prime minister to end sales tax on exports and reintroduce the zero-rated facility.
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