Pakistan's Textile Industry: Export Challenges and Opportunities
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- Published: Tuesday, 31 October 2023 02:57
The Pakistani textile industry faces a complex situation. Spinners are requesting concessions due to rising power and energy tariffs, but a surprising 33.5 percent surge in yarn exports during the first quarter of FY 2023 contradicts these claims. This period coincided with increased power and energy rates.
From July to September 2023, Pakistan exported 114,818 metric tonnes of cotton yarn, worth $315.40 million, compared to the previous year's 73,209 metric tonnes valued at $236.26 million. This is remarkable, given the sector's heavy reliance on energy.
Yarn exports continued to rise, with September witnessing a 49.8 percent increase, reaching 41,563 metric tonnes. During this quarter, yarn exports outshone all other manufactured textile items.
Nonetheless, the broader textile industry faced a downturn, with a 9.95 percent decline in total textile exports. Challenges included a 10.88 percent drop in textile and clothing exports in September.
This export decline can be attributed to global economic challenges. While volume increased for knitwear and ready-made garments, exporters had to reduce rates to stay competitive.
Statistics reveal shifting dynamics within the industry, such as ready-made garments declining in value but increasing in quantity. Textile and clothing exports contracted by 14.63 percent in FY23, affecting the industry's performance.
Textile millers demand regionally competitive energy tariffs and a return to a zero-rating regime for global competitiveness. Although export volumes have risen, the decline in dollar value reflects global rate pressures.
Another concerning trend is the 75.38 percent decline in textile machinery imports, highlighting a need for modernization. Unfortunately, many spinning units continue to rely on outdated machinery.
In summary, Pakistan's textile industry shows promise in export volume but faces multiple challenges. Competitive energy prices, cash flow resolution, and modernization are essential to sustaining global competitiveness and industry growth.