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KARACHI: Pakistan textile exports have fallen around twelve percent so far in the month of September compared to the same month of the previous year, The News learnt on Wednesday.
Textile millers have been struggling to increase their exports because of a host of issues, especially the non-opening of letters of credit for the import of spare parts and machinery.
This was disclosed by the textile industrialists in both Karachi and Faisalabad, the two main textile making centres of the country, when they were approached about hindrances in exports.
The high cost of cotton after its crop was severely damaged in Sindh because of flood has been also contributing to the hardships of the sector.
“Textile exports are down by 12 percent in the current month of this year over the corresponding month of last year,” Asif Inam, chairman of All Pakistan Textile Mills Association (APTMA)-South Zone told The News.
Faisalabad-based Patron-in-Chief of Pakistan Textile Exporters Association (PTEA) was worried about the fall in the exports, while Karachi-based Zubair Motiwala, a textile miller, also predicted the downfall in exports in view of the crisis in the textile industry.
Pakistan’s textile sector was on a growth trajectory for the last few years, and even survived the onslaught of Covid-19 when it managed to post growth in that difficult time.
But now, Inam said the textile sector was not only facing a liquidity crunch, but also problems in opening letters of credit, as banks were reluctant to issue the necessary guarantee documents for the import of spare parts, machinery and raw materials. He pointed out that the issues were worse for the spinning sector, with units being closed down.
Motiwala also reiterated that letters of credit were not being opened for raw materials and spare parts, which was hurting the expansion and modernisation plans of the sector. If expansion was not taking place that meant growth has halted, and it would also decreased the exports of textile goods, he said.
Gas crisis and high electricity bills were also to blame for the textile sector woes, he pointed out. “Textile exports can’t growth in the face of shortage and expensive gas and power,” he added.
Khurram Mukhtar, however said that matters regarding HS code 84 and 85 have been resolved by holding meetings with the State Bank of Pakistan, and it would pave way for the clearance of spare parts.
During the first two months of the current financial year, the textile sector’s total exports increased by 4.2 percent to $3.056 billion from $2.93 billion in the same period last year. In the financial year ended on June 30, 2022, the country’s textile exports registered 26 percent growth to $19.3 billion over the corresponding month of the previous year.
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