Textile and clothing exports of Pakistan have a recorded 9.47 percent year-on-year basis decline to $1.088 billion in March 2019, taking the 9 months (July-March FY19) exports to $9.99 billion, as economic uncertainty and a higher cost of doing business has kept the industry under pressure.
Mr Ahmed Lakhani at JS Global Capital said, “This is the largest monthly decline in textile exports since May 2017, and it should also be noted that during that previous instance the drop in textile exports (-12 percent) was due to external factors i.e. transporters’ strike.”
According to the report of the Pakistan Bureau of Statistics (PBS), on month-on-month basis, the textile sector exports have recorded a decline of 0.12 percent in March as compared to $1.09 billion recorded in February 2019.
An industrialist said Pakistan’s exports were mainly dependent on imported inputs. “Fluctuation in rupee value and costlier utilities rendered Pakistan’s products uncompetitive in the international markets.”
Cotton yarn exports have decreased 28.23 percent in March on year-on-year basis to $91.919 million; bed wear exports decreased by 3.63 percent to $189.234 million; knitwear exports declined 6.48 percent to $215.28 million, readymade garments exports slipped 3.42 percent to $214.915 million, and however cotton cloth fetched $185.55 million in March, down 3.42 percent over the same month a year earlier.
Mr Lakhani said that “During March 2019, every major textile segment witnessed a decline in exports. The dismal performance during this month can mainly be attributed to declining textile imports by China, Pakistan’s major yarn customer, whereas a fall in global demand and higher local sales were also likely causes of the decline during the month.”
But, current statements by the country’s policymakers suggest optimism that exports were expected to show resurgence in the next one or two months, which also conveniently coincides with the ongoing China-Pakistan Free Trade Agreement-II and the upcoming Federal Budget in May 2019.
An office bearer of FPCCI said the policy of higher interest rates had backfired, as there was no respite in inflation, but industrial investment had slowed down. It is said that no industrialist could afford to expand at the prevailing interest rates.
Furthermore, the currency devaluation also proved counterproductive, as the exports had not picked up in spite of 34 percent devaluation since January 2018.