KARACHI: Textile exports rose around eight percent to $3.26 billion in the first three months of the current fiscal year as key value-added sector’s exports improved.
Pakistan Bureau of Statistics (PBS) data on Saturday showed that textile industry fetched $3.02 billion in exports revenue during the corresponding period a year ago.
Exports of knitwear increased 9.4 percent year-on-year to $647.65 million in the July-September quarter. Bed wear exports jumped 7.2 percent to $566.96 million, exports of readymade garments climbed 16 percent to $608.07 million and towel exports edged up one percent to $180.22 million during the quarter under review.
Analysts said government trade rationalisation strategy has started bearing fruits.
In January, the ousted prime minister Nawaz Sharif announced Rs180 billion worth of trade incentives for five export-oriented sectors to arrest decline in exports.
“This [Prime Minister Trade Initiative] package would lead to one to two billion dollars increase in exports,” Mohmmad Sohail, chief executive at Topline Securities said. “Still, current account deficit will come at around $15 billion for the ongoing fiscal year.”
Sohail said government should look around to non-textile sector as well while lending financial assistance despite that textile industry accounts for more than 60 percent of exports revenue.
He argued against the government’s resolve to keep rupee stable.
“I personally believe that five to eight percent currency devaluation is needed,” he said.
In September, textile exports increased 12.4 percent year-on-year (YoY), but decreased 8.1 percent month-on-month (MoM) to $1.08 billion.
While exports of knitwear, bed wear, towels and readymade garments rose 13.4, 5.4, 4 and 16.7 percent YoY, respectively, they fell 15.1, 15, 3.1 and 8.1 percent in September over August. Early this week, government eased condition for exporters to avail duty draw back under the PM package.
Exporters were demanding of the government to disassociate the incentives from a condition of increase in exports. So, the government allowed half of duty drawback without any condition, whereas half is still conditioned with at least 10 percent increase in exports till June 2018.
Industry experts said the country is still far behind to return to the $25 billion annual exports level. The country’s annual exports fell to $20.4 billion during the last four years.
While government ascribed the shrinkage to soft demand in the international market the experts put blames on unmet promises.
Pakistan Apparel Forum (PAF) Chairman Mohammad Jawed Bilwani criticised the government’s fondness to ballyhoo trade incentives.
He said the government should first implement a policy as “foreign buyers seek discounts as soon as they come to know of such packages despite that there is no thing, but a tall claim.”
PAF chief said billion of rupees on account of sales tax, customs rebate and drawbacks are yet to be released.
Meanwhile, PBS data further showed that oil import bill swelled 34.5 percent YoY to $3.17 billion in the first three months of the current fiscal.
Total imports amounted to $14.26 billion in July-September, up 22.2 percent over the same period a year ago.
Other major imports, during the three months, included machinery (ratcheting up 1.82pc to $2.78 billion), chemicals and agricultural implements (increasing 19.2pc to $2.10 billion), foods (soaring 19.4pc to $1.62 billion) and metal group (shining 45pc to $1.34 billion).
In September, imports increased 16.7 percent YoY, but decreased 9.7 percent MoM to $4.47 billion. Government slapped heavy regulatory duties to curtail imports. Sohail of Topline expects one to two billion dollars reduction in imports during the current fiscal.