Raza Khan

Textile exporters are optimistic about the future growth despite a 15% decline in exports during the first 11 months (July-May) of the current fiscal year. Talking to WealthPK, Ejaz Gohar, Pattern-in-Chief of All Pakistan Textile Manufacturers Association (APTMA), said that the textile sector was performing well despite domestic issues and recession in major markets, including the United States. “Our textile exports dropped by 15% during July-May period of the current fiscal year due to many challenges. Most economies round the globe are struggling and exports from many countries have shrunk this year. Pakistan is no exception,” Ejaz said.

“The government should take certain measures to save exports from major collapse. However, some of the circumstances are unavoidable like recession and high prices of energy and raw materials in the global market. “Pakistan’s textile sector has a huge potential and ability to make a positive turnaround in the coming months when the global financial situation stabilizes,” he added.

According to the APTMA data (provisional), textile exports dropped to $15.02 billion during July-May period of the current fiscal year from $17.61 billion in the corresponding period of FY2021-22, with a decline of 15%. In a month-on-month comparison, exports dropped by 20% in May this year to $1.31 billion from $1.64 billion during the same period of the last year, making it the 8th consecutive month of negative growth.

Ejaz said exports were the only hope to revive the economy but unfortunately, issues like the non-opening of LCs, cash flow crunch and high cost of production were hitting manufacturing and exports more than the global market recession. He said ban on the import of raw materials during the last several months of the current fiscal year caused a decline in production and exports. He further said the textile sector was also facing a reduction in cotton production.

“Textile sector needs around 12 million bales of cotton, while local production is just 5 million bales this year,” he said. Ejaz expected an increase in textile exports next year if the economic crisis eased and the industry got support from the government. The APTMA already fears a 15% to 20% decline in exports during the current fiscal year as against the last fiscal year due to various domestic and global challenges.

Pakistan achieved the highest-ever textile exports of $19.329 billion in the last fiscal year (2021-22). However, this trend couldn’t sustain, as exports started to decline in October last year after recording single-digit growth during the first three months (July, August, September) of 2022-23. In 2021-22, exports accounted for 60.92% of the country’s total exports of $31.76 billion.

According to the Board of Investment (BOI), Pakistan is the 8th largest exporter of textile products in Asia, 4th largest producer and 3rd largest consumer of cotton. According to BOI, the textile sector makes 46% of the total manufacturing sector and provides employment to 40% of the total labour force. According to the Textiles and Apparel Policy 2020-25, the current year’s textile exports target has been set at $25 billion.

Credit: Independent News Pakistan-WealthPk