Pakistan likely to lose $2.5bn textile exports if power crisis continue

Pakistan has exported textile made goods worth of $4.6 billion during four months (July-October) of the financial year 2014-2015 as against $4.7 billion of the corresponding period of the previous year registering decline of 1.54 percent due to the ongoing power crisis faced by the textile sector despite receiving GSP plus status from the European Union

The government was anticipating enhancing country’s exports by $1 billion annually following getting GSP plus status. However, things have moved in opposite direction, as exports plunged in last several months mainly due to the ongoing energy shortage.
The country’s overall exports have shrunk by 6.86 percent in July-October to $7.98 billion from $8.56 billion of the corresponding period last year.

The government seems unable to address the business community problems in short-run, as it could not provide gas to the textile units due to scarcity of gas in the country despite Prime Minister Nawaz Sharif had taken notice in this regard.

A high-level committee constituted by premier under the chair of Finance Minister could not make consensus regarding supplying gas to the textile industries. The government believes that domestic consumers would face worsen gas loadshedding if it provided to industries in winter season.

Sources in All Pakistan Textile Mills Association (Aptma) informed exports would further decline in next three four months due to the unavailability of gas to the textile units. In case the industry remains non-operational during winter, it will lose a total of $2.5 billion exports. Such a situation would create havoc in the industry, as it would inflict negative impact on the country’s exports, said a representative of the Aptma.

According to the Pakistan Bureau of Statistics figures, textile exports had recorded increase of 6.51 percent in October 2014, as it registered at $1.18 billion in last month against $1.11 billion of the corresponding period last year.

The PBS data showed that export of raw cotton registered a negative growth of 8.28 percent, cotton yarn 17.1 percent, cotton cloth 15.64 percent, cotton carded or combed 96.06 percent, yarn 13.36 percent and bed wear 0.72 percent.

On the other end following of the commodities recorded positive growth: knitwear 10.89 percent, towels 4.23 per cent, tents, canvas & tarpaulin 159 percent, readymade garments 8.11 percent, art, silk & synthetic textile, 33.42 percent, madeup articles 1.77 percent, other textile materials 13.78 percent during the four months of 2014-2015.