Exports of textile, clothing edge lower

Source:  Dawn.com Published in Business & Economy on Tuesday, May 24, 2016

ISLAMABAD: Exports of textile and clothing fell eight per cent to $10.4 billion during the first 10 months (July-April) of this fiscal year from $11.3bn a year ago, the Pakistan Bureau of Statistics said Monday.

The exports stood at $1.03bn in April, a fall of 3.5pc compared to $1.07bn in the same month of the last year.

Exports of the value-added textile sector, after increasing for a few consecutive months, also dropped. The textile and clothing sector has been facing chronic energy shortage and stuck-up exporters’ refunds.

In the whole textile chain, only garments and towels witnessed a nominal growth during the period under review. Readymade garments exports rose 5pc and towels by 0.4pc.

Export of low value-added products, such as cotton cloth, fell 10pc, cotton yarn 32pc, cotton carded 98pc, yarn (other than cotton) 23pc and that of made-up articles (excluding towels and bedwear) by 2pc during the period under review.

In the value-added sector, exports of bedwear dipped 4pc and knitwear by 2pc. Raw cotton exports plunged 47pc during July-April FY16.

Total export proceeds declined 13pc to $17.3bn from $19.9bn a year ago.

Trade analysts believe that by encouraging exports of raw materials or semi-finished products, Pakistan is exporting jobs to other countries.

While talking to Dawn, a leading exporter predicted that exports of value-added textiles would drop further because of government’s “irrational policies”.

The government increased the sales tax from 2pc to 3pc in the budget, which led to piling up of exporters’ refunds with the tax department, he said.

The government has also imposed 10pc regulatory duty on yarn imports from India, mostly used by knitwear and woven apparel segments, to further increase the cost of doing business, he said. “Therefore, the price of domestically produced yarn increased manifold.”

OIL AND EATABLES: The import bill of these two products plunged 25.5pc to $10.5bn during July-April FY16 from $14bn in the same period of the last year.

The total import bill declined 4pc to $36.3bn from $37.7bn.

Imports of food products surged 4.7pc to $4.4bn from $4.2bn, mainly due to higher imports of soya bean oil, tea and pulses.

Oil imports, of both crude and finished petroleum products, plummeted 38pc to $6.1bn during the 10-month period from $9.9bn a year ago.