Textile exports in Pakistan have declined by 30 percent this fiscal year, and the country’s All Pakistan Textile Mills Association (APTMA) chairman S.M. Tanveer says high cost of doing business and overvalued currency are hampering the trade.
According to APTMA, textile exports are down in fabric and quantitative terms in particular, and the euro’s fall against the rupee is only exacerbating the export setback. The euro dipped 21 percent against the Pakistani rupee in the last six months, and with 35 percent of the country’s exports destined for the E.U., Tanveer said textile exporters are in need of immediate aid. This erosion of competitiveness, he added, has offset the benefits from Pakistan’s GSP Plus trade status with the E.U.
Because of its ongoing energy shortage, Pakistan’s textile facilities are only being supplied with gas for six hours a day, and production volume is suffering as a result. Add to that energy costs that are as much as 62.5% higher than its regional competitors, at 13 cents per kilowatt-hour (kWh) compared to 8 cents/kWh in neighboring countries, and the country’s competitiveness is taking a hit.
Tanveer said the Pakistan government should provide support for the sector by keeping currency at a realistic value to mitigate the high costs of doing business and to maintain a competitive advantage for the country.