Textile exports fall 20 percent in May

ISLAMABAD: Textile exports from Pakistan fell 20 percent to $1.31 billion in May 2023, compared to $1.64 billion in the same month last year, according to the latest data released on Friday.In the first 11 months of the fiscal year 2022-23, textile exports dropped 15 percent compared to the same period in the previous fiscal year. The total exports of textile products have reached $15.01 billion in the first 11 months of the current fiscal year, compared to $17.61 billion in the same period of last fiscal year.

The data shows that in the first three months of the ongoing fiscal year, textile exports remained on a positive trajectory. In July 2022-23, textile exports increased by 1 percent to $1.48 billion from $1.47 billion in the same month in fiscal 2021-22. In August 2022-23, textile exports surged by 8 percent to $1.58 billion from $1.46 billion in the last financial year. And in September 2022-23, exports went up by 3 percent to $1.53 billion from $1.49 billion in the last financial year. However, textile exports remained in a negative trajectory by 15 to 29 percent from October 2022 to May 2023. In October 2022, exports plunged by 15 percent. In November, exports fell by 18.39 percent. In December, exports decreased by 16.05 percent. In January 2023, exports scaled down by 15 percent. In February, textile exports decreased by 30 percent. In March, exports fell by 23 percent.

In April, exports went down by 29 percent. And in May, exports fell by 20 percent. According to the All Pakistan Textile Mills Association (APTMA), textile exports are estimated to fall by $3 billion this year from the exports achieved last year of $19.4 billion.This is without taking into account any increase from newly installed capacity, given the trajectory of decline that started from October 2022. On an annual basis, the loss of support for the balance of payments will be well over $6 billion per annum, further deepening and exacerbating the unsustainable economic situation.

APTMA says that the progressive decline in exports is a consequence of the moratorium on the import of raw materials and essential spare parts, lack of adequate supply of energy at competitive prices, and failure of the sales tax refund system. These factors have all contributed significantly to the closure of over 50 percent of the industry.Import of cotton and other raw materials has been severely restricted without considering the consequences. Banks are not opening Letters of Credit (LCs) or retiring cotton or PSF imports through cash against documents. The industry is running out of stocks.