Page 8 - TEXtalks International October/November 2022

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The textile industry of Pakistan

faces a worrying situation

The textile industry of Pakistan is in a troublesome issues relating to the Letter of Credits some three
situation due to both internal and external factors, months back. However, industry sources say no
including the ongoing recession in the western such meeting could take place to date.
retail markets, expensive imports of raw materials,
the State Bank of Pakistan-led sanctions on It may be noted that the oil imports went up by
clearance of imported consignments and the 27.82%, while natural gas production dropped by
reopening of competitors like Bangladesh after the 6% in the fiscal year 2020-21, the annual report of
threat related to COVID-19 is over. the Oil and Gas Regulatory Authority shows.
According to the annual report, natural gas
According to the industry circles, high cotton prices production dropped to 2006 MMcf/d after a 6%
have become equal to the yarn rates, which has led drop in 2020-21. However, the report read that local
to production suspension both in the Northern and refineries’ production went up by 14.48%.
Southern zones. Most of the millers, failing to get
new orders from their European buyers, have In a recent presentation made to the Minister of
preferred to adopt the wait-and-see policy. Smaller State for Petroleum, Senator Dr. Musaddaq Malik,
units have already closed down operations, and the leadership of All Pakistan Textile Mills
according to some estimates, the number of such Association (APTMA) Punjab spoke at length about
units has reached 100. the energy constraints for the industry in Punjab,
saying that it is already being supplied only 50% of
Meanwhile, Sui Southern Gas Company (SSGC) gas compared with the last years gas consumption
has suspended the system gas supply to the textile which comes to 70 MMcfd against a requirement of
manufacturers in the province of Sindh. The system approximately 200 MMcfd, which is less than 1/3 of
gas supply is already withheld in the province of the required quantity.
Punjab, and only the Regasified Liquefied Natural
Gas (RLGN) is being supplied to the textile mills. The export sector’s total requirement for gas/RLNG
is 350 MMcfd which is approximately 9% of the total
Both the affordability and availability of gas have supply of approximately 3800 MMcfd expected this
become a gruesome challenge for the textile sector, winter. Gas / RLNG allocation follows a merit order
which has added new capacities through the basis, placing domestic and power generation use
Temporary Economic Refinance Facility (TERF) of at a higher priority than the export sector. Load
the State Bank of Pakistan, and now has the enhancements and new connections are delayed
potential to generate more than $ 24 billion exports and kept pending for a long. Gas/RLNG curtailment
in FY 23 is dependent on adequate gas/RLNG has been consistently applied on the units located
supply to mills. It is worth noting that former Federal in Punjab, and it is being supplied to the mills in
Finance Minister Miftah Ismail had directed Punjab at 9$/MMBTU, which is much more than the
Governor SBP to visit APTMA and address their cost of $ 3.75 applicable to the rest of the country.

October/November 2022 October/November 2022