Textile exports decline by 15pc in June on budgetary measures

KARACHI: Pakistan’s textile exports fell by 15 percent in June 2019 to $1.01 billion as compared with $1.19 billion in the same month of the last year, according to export data released by Pakistan Bureau of Statistics (PBS) on Friday.

The exports of June 2019 has also exhibited 14.55 percent decline when compared with $1.18 billion in May 2019.

Analysts said that uncertainty in exchange rate and budgetary measures have negatively impacted the exports in the month of June 2019.

They said that the currency fluctuated massively during past two months, which increased the cost of imported raw material. Further budgetary measures including elimination of sales tax zero-rating for five export sectors also caused in export decline.

The overall exports of textile products fell by 1.42 percent to $13.33 billion during fiscal year 2018/2019 as compared with $13.52 billion in the preceding fiscal year.

The experts said that despite several incentives given by the government to this particular sector the exports were remained stagnant. They said that the government in terms of incentives had granted rebate and credit on duty and taxes.

The exports of knitwear and readymade garments have supported the overall textile exports. The export of knitwear grew by 7 percent to $2.89 billion during fiscal year 2018/2019 as compared with $2.711 billion in the preceding fiscal year.

Similarly, the export of readymade garments exhibited growth of three percent to $2.65 billion in the fiscal year under review as compared with $2.577 billion in the fiscal year 2017/2018.

The export of raw cotton and cotton year witnessed decline of 65 percent and 18 percent during the comparative fiscal years.

However, export of bead wear was remained flat at $2.262 billion in fiscal year 2018/2019 as compared with $2.261 billion in the preceding fiscal year.

The State Bank of Pakistan (SBP) in its third quarterly report on Pakistan Economy said that the stagnation in overall textile exports stemmed from a slowdown in export growth (in value terms) of readymade garments and knitwear items, and Year on Year (YoY) declines in cotton fabric and yarn exports.

Except for yarn, export values of all these major products suffered from a drop in unit prices, as quantum exports grew appreciably. The drop in dollar-based unit prices was mainly owed to exchange rate adjustments, as exports rose significantly in Pak Rupee terms, the SBP said.

In rupee term the textile exports registered 22 percent growth during 2018/2019 as compared with preceding fiscal year.

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