Pakistan textile exports plunge by 30% in February 2023

Pakistan textile exports plunge by 30% in February 2023

KARACHI: Textile exports of Pakistan have plunged by 30 per cent in February 2023 owing to challenging economic scenario of the country.

The textile exports fell to $1.18 billion in the months of February 2023 when compared with $1.68 billion in the same month of the last year, according to data released by Pakistan Bureau of Statistics (PBS).

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The decisions of the government to remove subsidies for export oriented sectors has started showing adverse effect on the textile industry.

“The decision of the government to suspend the regionally competitive energy tariff (RCET) of electricity for EOUs across Pakistan will render the textile industry, especially in Punjab, uncompetitive within the country and the region,” All Pakistan Textile Mills Association (APTMA) said in a note sent the government authorities. This particularly hurts Punjab based industry, it added.

The price differential between effective electricity prices in Punjab and Sindh is more than 3.65 times in EOUs in Sindh can generate electricity at Rs11/kWh from gas beig provided at $4/MMBtu while Punjab gets gas/RLNG at $9/MMBtu.

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It further said that the gas/RLNG being provided to EOUs in Punjab also comes with the caveat that it will not be used for electricity generation. Therefore, the only available energy for EOUs in Punjab after March 1, 2023 will be grid electricity at over Rs40/kWh.

“This will necessarily shift available orders to cheaper alternatives internationally and within Pakistan,” it said, adding that the grid electricity apart from being uncompetitive is unavailable and substandard, reducing effective production capacity by over 25 per cent.

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APTMA further stated that the anomaly is compounded by the intermittent of gas/RLNG to Punjab-based EOUs which has been at times nil supply, 25 per cent supply and 50 per cent supply based on average consumption of August, September and October 2021.

“This method also ignores new projects/expansion etc. rendering non-operational, a significantly enhanced capacity through Terf etc. over last two years.”

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The textile exports in the month of February 2023 also fell by 10.7 per cent when compared with $1.32 billion in the month of January 2023.

Cumulatively, the exports of textile products slipped by 11 per cent to $11.22 billion during when compared with $12.62 billion in the corresponding period of the last fiscal year.