Textile woes not Pakistan specific

LAHORE: The decline in Pakistan’s textile exports by 18.155 percent is a depressing news. However, it should not be viewed in isolation from the current global trends as textile and apparel exports from most competing economies also declined.

Textile and clothing sector is under stress the world over as the major consuming countries are grappling with high inflation. Majority of consumers are forced to reduce buying new clothing to spare their resources for other pressing needs.

McKenzie in its latest report on fashion clothing has predicted that there will be a decline in sales of low priced apparel in 2023, but overall apparel sales would be higher next year as the high end consumers would continue with their normal buying spree. Vietnam, Bangladesh and China among the Asian economies make high end garments.

In India, the exports have been declining for the last five months. In November, the decline was over 15 percent over the exports executed during the same month last year (nearly the same as ours).

According to the Indian Ministry of Commerce and Industry, the fall in textiles and clothing exports from India started in July this year when exports declined by 17.4 percent, in August the fall reached 19.5 percent, then to 28.5 percent in September, 35.4 percent in October and to 15.6 percent in November. In comparison, Pakistan’s textile exports posted a decline of 5.1 percent during the same 5 months.

Vietnam with textiles and garments exports of $2.8 billion in the month of November 2022 posted a decline of 8 percent compared with exports achieved during the same month in 2021. The decline in exports started in September, when textiles and clothing exports registered a decline of 31.9 percent according to figures released by Vietnamese Customs.

Only a week back, four readymade garment factories of DIRD group of Bangladesh located in Hemayetpur of Savar employing over 10,000 workers, were closed indefinitely as the orders dried from overseas buyers.

There is panic among Indonesian clothing workers as the layoffs are increasing every day. More than 64,000 workers have been shown the door in the past two months.

Chairman of the West Java Province Textile Product Entrepreneurs Association (PPTPJB) Yan Mei in a virtual press conference revealed that, there have been reports from 14 regencies and cities in West Java regarding termination of employment or layoffs from a number of textile companies.

He said there was a drop in exports, while imported clothing eats away the domestic market share. He said of the 124 companies affected, 18 garmenting units in Java were closed, which resulted in the layoff of about 10,000 workers. Over 64,000 workers were laid off by 114 companies because of a sharp decline in orders.

It seems the instructions of foreign buyers to hold the consignments ready for shipment has created a financial crunch. The exporting factories are sitting on huge unshipped stocks produced on orders of foreign buyers. This has resulted in the inability of RMG producers to pay salaries of their workers as well as clearing the dues of their local suppliers.

The Pakistani textile sector is facing the same issues faced by the textiles and clothing sectors in India, Bangladesh, Vietnam and Cambodia. All are facing an energy crisis after the Russia-Ukraine war. All are facing supply chain hurdles because of frequent Covid-19 restrictions in China.

Though Pakistan faces more difficulties in this regard, it is also totally dependent on imports of all accessories, including dyes needed in textile production. Last, but not the least, the foreign brands have either put their orders on hold or have curtailed the quantities substantially.

So Pakistan is not the only one facing difficulties in the textile exporting sector. Regional competitors have been facing the same, and the issues would likely persist because of high inflation in export markets.