Textile exports down 65pc in April amid lockdown

KARACHI: Textile sector saw exports sharply fall in April as the virus-based lockdown stupefied industrial activities, while foreign orders were put on hold amid slackening consumer demand world over, latest official data showed.

Textile sector, which accounts for 60 percent of Pakistan’s total exports, fetched only $403.8 million in export earnings in April, down 65 percent year-on-year and 61 percent month-on-month, according to the Pakistan Bureau of Statistics.

Value-added sector that started to post a sign of recovery in the pre-corona era bore the brunt of the virus-led economic disruption. Exports of knitwear slumped 62 percent year-on-year and 56 percent month-on-month. Bed wear exports slid 58 percent and 53 percent. Towel exports fell 74 percent and 73 percent. Readymade garments exports declined 73 percent and 71 percent. Since the lockdown in March, economic activities came down to a sudden halt. Port operations were partially stopped, while exporters were waiting clearance of their consignments. Foreign orders were stopped as the pandemic led to falling consumer buying. The virus tumult aggravated woes of the economy reeling under stabilisation measures.

Textile exports fell around 3 percent to $10.8 billion in the July-April period of the current fiscal year. In terms of rupee, however, the foreign receipts of the textile sector increased 14.2 percent in the first 10 months of the current fiscal year. This was due to rupee devaluation that worked as an incentive for exporters to increase exports. Readymade garments saw a 2.1 percent increase in exports, in terms of dollars, while their exports showed 19.4 percent growth in terms of rupee and 0.5 percent increase in terms of quantity in the July-April period.

In terms of dollars, exports of knitwear, bed wear and towels fell 0.2 percent, 3.3 percent and 7.4 percent, respectively. They increased 17.4 percent, 14 percent and 8.5 percent, in terms of rupees, respectively. The government announced lockdown to prevent spread of the coronavirus. Although the federal government is in favor of ease in lockdown to avert economic losses, Sindh government is hell-bent to extend the lockdown that started to ease in other parts of the country. The mixed communication keeps traders and businessmen on tenterhooks in the province that houses majority of industries and commercial enterprises.

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. The central bank said even the rate cut couldn’t “prevent the near-term fall in economic activity due to lockdowns”. The State Bank of Pakistan has so far delivered 525 basis points reduction in the benchmark interest rate in the last two months to help business and households ease their liquidity crunch.