Textile Mills in Pakistan contributes more than 60% of the US 9.6 billion dollars to its total exports. However, presently, this industry is facing a remarkable decline in its monthly growth rate.
The backbone of Pakistan’s Economy
While the textile industry of Pakistan continues to be an export cash cow, the national share in the global textile business line has experienced an ongoing contraction, Covid is somehow a reason. But not an only reason to introduce the decline in growth rate.
As compared to the last year, Pakistan’s textile exports have shown a 15 percent year-on-year decline in August FY21.
This paradox is evidence that the textile industry has limped behind India, China, Bangladesh, and Vietnam in the wake of many bottlenecks, including an overestimated rupee and exorbitant power tariffs.
Why Textile Mills in Pakistan experiencing an incessant contraction?
This decline’s primary reasons can be the global recession, internal security concerns, the high cost of manufacture due to an increase in energy costs, etc.
Depreciation of the Pakistani rupee that significantly raised the price of imported inputs, the rise in the inflation rate, and the high cost of financing have also affected the textile industry’s growth.
As a result, neither the buyers can visit Pakistan frequently nor are the exporters able to market the Textile Product Line Business effectively.
What is the significant issue around the drop-down?
There is also a significant decline in the shipments of the essential textile supplies such as yarn or grey cloth. It is being indicating that the country is exporting more valued products than ever and before. It also reflects a shortage of raw resources for the value-added industry owed due to an extremely poor cotton harvest this year.
Besides, the local cotton prices have drawn to a 10-year high due to a sharp droplet of 37.6 PC in the cotton arrivals. By December 3, it ginn to 4.6 million bales as compared to 7.4m bales last year.
When was the issue addressed?
The concern was addressed when the currency wasn’t able to sustain its artificially uplifted value in Pakistan. However, the cost of electricity remained elevated on that time.
For instance, if we remember that the local textile players coerced to consume electricity at that rate of 11.5 cents per KWH at the beginning of the year. The same consumption was available at 7.5 cents per KWH in China. Likewise it was 9 cents per KWH in Bangladesh and 8 cents per KWH in both Vietnam and India. It is quite clear that due to this made it demanding for them to compete for market share against these counterparts.
How can Textile Mills in Pakistan overcome this decline?
Undoubtedly, Pakistan’s textile industry can again be brought back on the winning track if the government takes serious actions to remove or normalize the hurdles, as mentioned earlier.
Additionally, the government should provide subsidies to the textile industry, minimize the internal dispute among the exporters, withdraw the withholding and sales taxes, etc.
Finally, Purchasing new machinery or enhancing the quality of the existing machinery, and introducing new technology can also be very useful. It can help increase research & development (R & D) related activities in the modern era are significant for improving a country’s Industrial Growth.
It is well said that the domestic sector of Pakistan is already planning expansion in the manufacturing and is ready to invest almost $5 billion across the textile chain to double the exports by 2025.
What is the lucrative energy package?
The government of Pakistan has in recent times announced a lucrative energy package for Textile Mills in Pakistan to help the exporters of textile recuperate from the Covid 19 shock. The box does away with peak rates of electricity offering reduced tariffs on additional power consumption and fixed power price at $0.07 a unit. Plus, they promise to provide exporters with gas tariff at $0.065mmbtu for their industries.
Will Pakistan’s textile product line business bounce back stronger?
Pakistan Is the 4th Major Producer Of Cotton In the World!
Pakistan’s textile exports seem to have mostly recovered from the pandemic shocks. And yes, It is still growing!
Pakistan Bureau of Statistics released the data for the first 4 months of the declined financial year, confirming that the textile and clothing export shipments are back on a growth trajectory in terms of their quantity and dollar value.
It is been said that Textile shipments have surged by 3.8% to $4.8 billion from $4.6 billion between July and October, a year ago.
The rise in the textile product line business has been a wee faster than ever! It is almost 0.6pc growth in the overall export, as per the studies! The export recovery is found in the knitwear, home textiles, and denim segments.
Pakistan’s textile sector back at full capacity
Textile companies in Karachi – the single largest export earning sector of Pakistan – have scaled up productions to pre-Covid-19 level of full-capacity, as a significant improvement in the pandemic containment country led the world buyers to divert their orders to domestic manufacturers partially.
However, textile production’s much-needed growth is achieved through a big jump in importing necessary raw materials such as cotton and human-made yarn. After the recent heavy rainfall and pest, the attack damaged a notable portion of cotton crops in the fields to a multi-year low.
The share of materials export earnings stands at 60 percent per year.
Pakistan is about to increase textile exports to $25.3 bn by 2025
“Most exporters are fully booked till March,” said MI Khurram, the chairman of Comfort Knitwear. “The recent rise in shipment is because of strong orders that are placed for the winter season in Europe and US. We are supposing exports to be increased in the coming months.”
Further, he concludes: “We see exceptional growth in textile and clothing exports. The confirmed orders are a windfall for Pakistan’s textile sector. How much extended this windfall last? We never know! It is all about trends. It can sustain for ages to come and go, and even it can fizzle out soon. It is all about the way we want to steer Pakistan’s industry into the future.”