Pakistan’s textile exports decreased for the fifth consecutive month in February, falling by 28% to $1.02 billion compared to the same month in the previous fiscal year.
APTMA data showed a grim image of textile exports, the largest contributor to the country’s overall export industry and the largest employer in the economy.
According to the APTMA, the country’s textile exports decreased by 11% in the first eight months of the current fiscal year, to $11.24 billion, from $12.60 billion in the comparable months of the previous fiscal year.
As a result of the drop in textile exports, the country’s foreign exchange reserves, which are currently only $3.81 billion and barely sufficient to cover one month’s imports, are already in decline.
Last month, the APTMA pushed the federal government to impose a nationwide uniform gas price of $7 per mmBtu for the export industry to level the playing field.
It was also predicted that the government’s move to suspend the regionally competitive energy tariff (RCET) for export-oriented units (EOUs) would negatively affect the textile industry, notably in Punjab.
In a letter to the government, APTMA Secretary General Shahid Sattar stated that the textile industry had requested an electricity tariff of 9 cents. However, calculations by the Central Power Purchasing Agency (CPPA) and National Electric Power Regulatory Authority (NEPRA) revealed that the electricity cost, including transmission and distribution losses, stood at 8.1 cents per unit when cross-subsidies were excluded.
The textile sector desires the government to persuade the IMF to retain RCET for exporters, particularly the textile industry, as it is crucial for the competitiveness of the goods on the worldwide market.
Sattar stated, “We invested $5 billion in the textile industry over the past three years, and the industry grew from $12.5 billion in FY2020 to $19.5 billion in FY2022.
He stressed that the government would squander $5 billion in investments and a 55% increase in exports in FY22 if it yields to IMF pressure.
