Pakistan’s textile exports fell for the fifth consecutive month in February, falling by 28% to $1.2 billion from the same month in the previous fiscal year.
Data from the Pakistan Textile Mills Association (APTMA) painted a bleak image of textile exports, the largest contributor to the country’s entire export industry and the largest employer in the economy.
According to the APTMA, the country’s textile exports in the first eight months of the current fiscal year fell by 11% to $11.24 billion from $12.60 billion in the corresponding months of the previous fiscal year. The country’s foreign exchange reserves, which are at just $3.81 billion and hardly enough for less than a month’s worth of imports, are already in decline as a result of the decrease in textile exports.
APTMA urged the federal government to impose a consistent gas price of $7 per mmBtu for the export business across the nation last month in order t o create a fair playing field. The government’s decision to suspend the regionally competitive energy tariff (RCET) for electricity for export-oriented units (EOUs) was also forewarned to have a negative impact on the textile industry, notably in Punjab.
According to calculations by the Central Power Purchasing Agency (CPPA) and the National Electric Power Regulatory Authority (NEPRA), the electricity cost, including transmission and distribution losses, stood at 8.1 cents per unit if cross-subsidies were excluded. However, the textile industry has been requesting an electricity tariff of 9 cents, according to APTMA Secretary General Shahid Sattar in a letter to the government.
The textile industry urges the government to convince the IMF to maintain RCET for exporters, especially the textile industry, as it was essential to keep the goods competitive on the global market.
“We have invested $5 billion in the textile sector over the last three years, and the textile sector surged to $19.5 billion in the financial year 2022 from $12.5 billion in FY2020,” Sattar said.
If the government succumbs to the IMF pressure, the robust growth of 55% in exports in FY22 and investment of $5 billion would go to waste, he pointed out.
