Textile exports drop to $13.7bn

ISLAMABAD: In a significant economic setback, Pakistan’s textile and clothing industry experienced a substantial decline of 14.22 per cent year-on-year to $13.7 billion during the first 10 months of the current fiscal year.

This downturn can primarily be attributed to a notable reduction in production, which was largely driven by the surging cost of production, data released by the Pakistan Bureau of Statistics (PBS) showed on Monday.

The export figures for April paint a bleak picture, as they witnessed a sharp and alarming decline of 29.11pc, plunging from $1.73bn in the corresponding month of the previous year to a mere $1.23bn.

This significant drop raises concerns about the current state of the country’s export sector and its potential repercussions on the overall economy.

The government is facing an uphill battle in meeting its export target, which could further exacerbate the strain on the country’s depleting foreign exchange reserves. The textile and clothing sector, a key contributor to exports, is grappling with a multitude of challenges.

These include soaring energy costs, delayed refunds, scarcity of raw materials, and a global decline in demand, despite the significant depreciation of the local currency. The combination of these factors is impeding the growth of exports and posing a serious threat to the country’s economic stability.

The textile export sector experienced a troubling trend of negative growth right from the beginning of the current fiscal year, except for a slight increase in August 2022 due to a backlog from the previous month.

This contraction in exports raises serious concerns as it poses challenges in maintaining a balanced external account for the country. The worrisome state of affairs in the textile industry could potentially have far-reaching implications for the overall economic stability of the nation.

The PBS data showed the exports of readymade garments recorded 9.63pc negative growth in value in 10MFY23 but grew by 50.82pc in quantity, while knitwear dipped 11.99pc in value but grew 7.49pc in quantity, bedwear posted a negative growth of 17.51pc in value and 22.75pc in quantity. However, towel exports slightly decreased by 11.10pc in value and 13.84pc in quantity, whereas those of cotton cloth dipped by 16pc in value and 25.86pc in quantity.

Among primary commodities, cotton yarn exports declined by 36.71pc, while yarn other than cotton by 32.79pc. The export of made-up articles — excluding towels — dipped by 17.57pc, and tents, canvas and tarpaulin went up by 28.09pc in 10MFY23 from a year ago.

The import of textile machinery declined by 55.32pc in 10MFY23 — a sign that expansion or modernisation projects were not a priority.