Textile exports slump for 12th month in a row

ISLAMABAD: Pakistan’s textile exports, a key source of foreign exchange for the cash-strapped country, fell 12 percent year-on-year in September, extending a streak of declines that started a year ago, data from an industry body showed on Wednesday.

The All Pakistan Textile Mills Association (APTMA) said textile shipments abroad amounted to $1.35 billion in September, down from $1.53 billion in the same month last year.

In the first quarter of the current fiscal year, which began in July, textile exports dropped 10% to $4.12 billion from $4.59 billion in the same period a year ago.

The textile sector, which accounts for more than 60 percent of Pakistan’s total exports, has been struggling with a host of challenges, including high energy costs, limited access to bank financing, and delayed refunds of sales tax and other duties. These factors have eroded the sector’s profitability and output.

Since October 2022, export earnings from this major segment of the economy have continuously dropped in double digits.

In October 2022, textile exports declined by 15.23 percent, November 18.15 percent, December 16.47 percent, January 14.8 percent, February 29.9 percent, March 22.6 percent, April 29.1 percent, May 19.57 percent, and in June by 13.7 percent.

Similarly, July 2023 (the first month of the current financial year) dropped by 11.4 percent, in August 7.65 percent and now in September 2023, it dwindled by 12 percent over the corresponding months of last year.

According to the APTMA data, during the first nine months of the calendar year 2023, the country's textile exports experienced a significant 18 percent decrease, totaling $11.90 billion, down from $14.53 billion in the corresponding period of 2022.

Over the previous month’s (August) exports of $1.46 billion, the sector’s sales abroad declined by 8.15 percent in September 2023.

In the previous fiscal year (July-June 2022-23), total textile exports declined by 14.6 percent to $16.5 billion compared to the record high of $19.35 billion achieved in FY2021-22. In FY21, exports were $15.4 billion.

Despite the dismal performance of the textile sector, commerce minister Gohar Ejaz, who is also the patron-in-chief of APTMA, expressed optimism for the future, citing the increase in cotton production and arrivals this year.

He said that Pakistan had crossed five million bales in cotton arrivals on October 1, a 34 percent increase from a year ago, thanks to the efforts of the farmers and the cotton industry. Ejaz also set an ambitious target of $25 billion in textile exports for the current fiscal year, compared to $16 billion in the previous year.