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March 27, 2020

Pakistan feared to lose $4bln of exports this fiscal

Business

March 27, 2020

KARACHI: Pakistan’s exports are feared to fall an estimated $4 billion this fiscal year as coronavirus outbreaks have brought industrial activities to near halt in the country, industry officials said on Thursday.

The officials said the country’s exports are going to take a serious hit with a very little or no exports in the last quarter of the current fiscal year. Exporters are unanimous that annual exports wouldn’t cross the $20 billion mark in FY2020. There is an average $2 billion worth of goods exported every month. Since exports are expected to be hurt for at least two months, $4 billion loss is obvious, they said. “At this point of time, there are no buyers in the world for our products, be they textiles, sports goods or surgical goods,” Mazhar Ali Nasir, an office bearer of the Federation of Pakistan Chamber of Commerce and Industry said. “Moreover, China has begun reviving its industry, so even after lockdowns are lifted across the world, Pakistan’s exporters would not be able to capture any substantial chunk of the global market.” Novel coronavirus has affected 200 countries with trade consignments being cleared slowly. Nasir said it is still unclear how long the lockdown would continue. “Though the government has announced an incentive package, most of the industry could not survive without international buyers,” he said. “Certain textile exporters have closed their units.” Exports showed a little recovery in the first eight months of the current fiscal year, up around 4 percent to $15.6 billion. Pakistan is struggling to improve exports sector’s share in GDP from the existing single digit. Exports fell to $22.9 billion in FY2019 from $23.2 billion a year earlier. Ministry of commerce expected $2.7 billion decline in exports in the next four months.

Zubair Motiwala, chairman of the Council of Textile Association said textile exports would suffer at least $2 billion. “The government’s support package for the textile sector is not enough,” Motiwala said. “The sector is going through a severe liquidity crunch as the buyers abroad are not making payments. We had some orders delayed but the cancellations are not yet rampant.” Food and vegetable exporter Waheed Ahmed said horticulture exports are expected to decline by at least 15 percent. “Last year, our total exports were $670 million. Mango season begins mid-May, and if we couldn’t export mangoes this season, overall exports will be down significantly.” Businesses are coping with the lost revenue and disrupted supply chains due to factory shutdowns and quarantine measures, restricting movement and business activity.

The International Monetary Fund says 2020 could see a recession worse than the global financial crisis, while the Organisation for Economic Co-operation and Development has warned the global economy would take years to recover. Sport goods exporter Muhammad Faraz said there are absolutely no orders from abroad as the markets are closed. “I think there would be zero sports goods exports in this quarter, as these are not the things that the world wants now.”

Exports via airlines have completely stopped, while shipments via sea have declined by over 90 percent in the last week. Akhlaq Abidi, a leading seafood exporter, said the entire world stopped importing sea foods. “We primarily export to China, UAE, Malaysia and Thailand. Now, a little export has resumed to China.”