Zero. That’s the growth witnessed by Pakistan textile exports for
both the month of October 18 as well as the Jul-Oct FY19 period on a
yearly basis. Those relying on the sector to alleviate Pakistan’s
current account woes will have to wait more to see if things take a turn
for the better.While cotton yarn registered a decrease of 35 percent in Oct-18 and
cotton cloth witnessed negligible growth, even value added segments with
the exception of knitwear failed to make any meaningful contribution in
raising exports. This is despite a depreciation of more than 18 percent
and 15 percent against the dollar and the euro respectively.
However, the quantity has indeed increased with knitwear exports
recording the highest growth of almost 38 percent across all segments
whereas other value added segments including towels and readymade
garments registered an increase in quantity-wise.
Readymade garments saw negligible growth for the 4MFY while for
Oct-18, the numbers were slightly optimistic with 8 percent growth on a
yearly basis. Textile players attributed the lethargic performance to a
variety of factors and believe that many of the actions that they have
called for have only been taken recently by the government.
For instance the provision of cheaper gas at the cost of $6.5/mmbtu
was only taken last month by the ECC whereas previously the Punjab based
gas industry was getting expensive RLNG and only 28 percent system
based gas. The promised relief in electricity tariffs to the sector is
also pending but textile associations are positive it will happen soon.
Duty drawback and sales tax refunds have also not been cleared which
exporters complain are hampering liquidity for further order processing.
These issues aside, this column has also highlighted the need for the
textile firms to invest in upgrading their plant and machinery to be
able to compete with the BMR intensive textile industries of Bangladesh
and Vietnam. Textile machinery imports have plunged sharply over the
last few years and were only USD325 million in FY18 and are the lowest
in the past decade. (Read: Textile machinery imports: steep decline)
There is also a strong need to tap in to non-traditional markets
including Japan and South Korea. The government has already provided
additional rebate incentives on exports to non-traditional markets so
the textile industry should make the most of it.
Source: Business Recorder, Pakistan Monday, 19 November 2018