Two percent decline in textile exports

[LahoreEstate]

KARACHI (January 25 2009): The continuing power crisis, poor law and order situation and high cost of production pulled down the country's textile exports by about 2 percent during first half of the current fiscal year. Exporters said that prevailing power crisis in the country had badly hurt the overall industrial activity, but largest export-oriented sector textile was one of the main affected sectors.

They said that textile exports have over 57 percent share in overall exports and decline in its exports was a matter of concern, which would definitely hurt the overall export target. "We were expecting that the new government would take some measures to improve the industrial activity and solve the problems of the industry. But it failed to provide basic facilities, like electricity and gas," they said.

They said that on the other side the government has raised utility tariffs, which is directly hurting the cost of doing business and at present the cost of production is highest in the region. Therefore, despite hard efforts, the textile export growth is insufficient due to rising cost of production, they added.

In addition, they said, the law and order situation of the country is also not satisfactory, and foreign buyers are reluctant to visit Pakistan. Overall, the country's textile exports stood at $5.137 billion during first half of current fiscal year as compared to $5.228 billion in same period of 2007-08, depicting a decline of $91 million.

Month on month basis, textile exports declined by 4.10 percent to 720.378 million dollars in December 2008 against 751.212 million dollars in December 2007. Textile exports also depicted a decrease of 14 percent in December 2008, when compared with 838.122 billion dollars in November 2008.

Exporters said that 6 textile products--raw cotton, cotton cloth, cotton carded, knitwear, towels and made-up articles--surged during the period under review, while exports of cotton yarn, readymade garments, bed wear tents, canvas and tarpaulin, artificial silk, and synthetic textiles dropped.

"Although the State Bank of Pakistan (SBP) has given a one-year moratorium on loans availed under the Long Term Financing Facility (LTFF) scheme for the industry, exporters termed it insufficient and said that despite several requests the federal government has not announced any relief package for the ailing textile industry. "We want reduction in interest rates, regular power supply and other utilities, infrastructure and access to the foreign markets, otherwise the country's textile exports would further decline," they said.

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