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January 17, 2019

Textile sector exports post dismal growth of 0.68 percent

Business

January 17, 2019

KARACHI: Pakistan’s textile and clothing exports recorded a meagre 0.68 percent year-on-year surge to $1.139 billion in December 2018, taking the six-month (July-December FY19) exports to $6.645 billion up 0.06 percent, as rupee devaluation failed to push exports in the absence of utilities for the industry.

Pakistan Apparel Forum (PAF) Chairman Zubair Motiwala said had there been no rupee devaluation, exports would have plunged significantly. “This is the only benefit currency devaluation brought for the export sector.”

On month-on-month basis, textile sector exports recorded a growth

of 28.19 percent in December compared with $1.1 billion recorded in November 2018, the Pakistan Bureau of Statistics (PBS) reported on Wednesday.

Motiwala said the cost of production was higher in Pakistan as compared to regional competitors, which had limited the market for Pakistani products in the world.

“Industry in Karachi was deprived of gas for 16 days in December alone. Karachi contributes 52 percent of the total exports and if this industry doesn’t get the gas, how can we expect to increase exports?” he asked.

In December, cotton yarn exports decreased 29.74 percent year-on-year to $75.76 million; knitwear exports rose 10.2 percent to $260.39 million; bed wear exports increased 9.08 percent to $193.11 million; readymade garments exports surged 3.59 percent to $238.119 million, while cotton cloth fetched $172.24 million in December, down 3.78 percent over the same month a year earlier.

An industrialist said Pakistan’s exports were largely dependent on imported inputs.

“Fluctuation in rupee value and costlier utilities rendered Pakistan’s products uncompetitive in the international markets.”

An office bearer of the Karachi Chamber of Commerce and Industry said the government did not have a long-term policy to encourage the country’s exports and support the local manufacturers.

“We hope the government would undertake some concrete and sustainable reforms for the export sector, as without increasing the exports, the country would not be able to achieve sustainable economic growth.”

Furthermore, the perennial issues plaguing the sector remain largely unaddressed, where lack of availability of system gas and costlier RLNG have forced several smaller mills to close operations, another negative for textile exports for the year.

“We expect textile exports to

recover going forward after its ongoing subdued performance. Export-oriented policies, government’s strong commitment to increase competitiveness, and the weakened rupee are all expected to contribute in making textile competitive in

the international market,”

analyst Taimor Asif of Pearl Securities said.