KARACHI: According to a study released on Monday by Pakistan’s top textile organization, the country’s textile exports fell a staggering 28 percent in February of this fiscal year, from $1.67 billion to $1.2 billion.
The All-Pakistan Textile Mills Association (APTMA) presented preliminary data that painted a bleak image of textile exports, the largest contributor to the overall export sector and the largest employer in the country.
According to APTMA, the country’s textile exports fell by 11% to $11.24 billion in the first eight months of this fiscal year from $12.60 billion in the comparable 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 to create a fair playing field. The government’s decision to halt the regionally competitive energy tariff (RCET) of electricity for export-oriented units (EOUs) will harm the textile industry, especially in Punjab, the APTMA said.
In a letter to the government, the secretary general of the APTMA, Shahid Sattar, stated that the textile industry has been requesting an electricity tariff of 9 cents despite the fact that, according to calculations by the CPPA and NEPRA, the cost of electricity, including transmission and distribution losses, was 8.1 cents/unit if cross-subsidies were excluded.
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.
According to Sattar, the textile industry increased from $12.5 billion in FY2020 to $19.5 billion in FY2022, thanks to $5 billion in investments made during the previous three years. He emphasized that if the government gives in to IMF pressure, the FY22 export growth of 55 percent and the $5 billion in investment will have been wasted.