The Pakistan Textile Exporters Association (PTEA) has expressed grave concern over 12.9 percent drop in exports in last month and demanded of the government to take immediate remedial measure in this regard.
Talking to newsmen here on Wednesday, PTEA Chairman Sohail Pasha and Vice Chairman Rizwan Riaz Saigal said that textile exports also witnessed 2.91 percent decline in February 2015 over the same month of the previous fiscal year and 9.96 percent drop over previous month.
They detailed that the country exported textile goods worth USD 1.087 billion in February as against exports of USD 1.119 billion in same month of previous year and USD 1.207 billion in previous month of January showing a hectic decline of 2.91% and 9.96% respectively. Export of value added items also witnessed negative growth as cotton cloth down by 15.47%, bed wear 4.82% and towels 8.34% compared to same month of previous fiscal. These may not sound like big numbers, but if the trend keeps up it could spell some amount of trouble for the economy, especially considering that the trade deficit is continuing to widen, they said.
They noted that drop in textile exports is clear indication of the fact that textile industry, particularly the Punjab-based, is unable to tap its potential in accordance with its capacity.
Pinpointing the prime reasons behind export decline, Sohail Pasha explained that high cost of doing business and lack of competitive edge with regional rivals including unprecedented energy constrains and unavailability of funds are badly hurting the textile export growth.
Value added textile export sector is already facing severe global competition as regional countries are providing lot of subsidies and incentives to its textile export sector to remain competitive in international market. Quoting the example of gas prices, he said that gas price in Pakistan is 6.27 dollars per mmbtu; which is higher than all the competitors.
“Per mmbtu gas price in Bangladesh is 1.91 dollar, in India is 4.20 dollar and in Sri Lanka is 3.66 dollar. Recently, in a bid to give stiff competition to Pakistan, India has flexed its muscles by proposing huge subsidies to its textile exporters,” he said. Terming lack of funds another hurdle in export growth, he said there is a capital blockage for textile exporters as their major capital remain stuck up in refund cycle, causing a major dent to textile exporters.
The vice chairman said that now is the time that the repair has to be made otherwise decline in exports would put irreparable loss to economy. Competitors made huge investments due to the positive and business friendly environment provided by their governments and taking advantage of the situation, they are creeping into our traditional markets throwing Pakistani textiles out.
To secure interest of economy, the PTEA office-bearers urged the government to bring the textile exports out of inflationary pressure.