Pakistan’s textile exports are on a downward spiral and don’t show signs of improvement for 2017.
Last year, the nation’s textile exports decreased by $600 million due to Pakistan’s trade deficit of $28.3 billion, the Daily Times reported.
All Pakistan Textile Mills Association (APTMA) chairman Aamir Fayyaz said textile exports could further decline by $1.2 billion in 2017 if the government doesn’t execute policy changes on exports and energy expenses.
“This gap cannot be bridged until export-led growth policy initiatives are undertaken at the earliest,” Fayyaz said. “Due to unrealistically high energy price in the province, where 70 percent of the country’s textile industry is located, the Punjab-based textile industry was exposed to a severe disparity in energy prices.”
Since 2013, Pakistan’s energy prices have been rising and the nation pays 4 cents more per kilowatt hour than competing nations. In the Punjab vicinity, higher energy prices caused more than 70 textile mills to shutter in the past six months, dramatically impacting Pakistan’s textile manufacturing capacities.
Fayyaz said cotton and man-made fibers, two basic raw materials of Pakistan’s textile industry, were imported because of national shortages.
“The acute domestic shortfall of cotton being procured at higher than import parity is having a crippling effect on the entire textile value chain,” he said.
Pakistan’s current tax dilemma is also impacting the nation’s place in the global textiles market, since such payments could not be transferred to international buyers.
Further, a lack of interest in the nation’s manufacturing sector persists, as Pakistan continues to favor free trade agreements with other nations over its domestic textiles industry.
The demise of Pakistan’s textile exports follows the recent closure of many textile factories in Pakistan. Since 2014, almost 100 factories have closed and over 500,000 jobs were axed from the nation’s textile sector.
The Pakistan Bureau of Statistics also reported that the country’s total exports were down 7.33% in August 2016 compared to August 2015 and ready-made garment exports declined more than 10 percent to $288 million last year.