Pakistan’s textile industry struggles as exports fall by 28% in February

On Monday, the All Pakistan Textile Mills Association (APTMA) released provisional data indicating that Pakistan’s textile sector exports declined significantly by 28 per cent, totaling $1.2 billion in February 2023, compared to $1.67 billion in the same month the previous year.

Additionally, APTMA reported that textile exports for the first eight months of FY23 decreased by 11 per cent to $11.24 billion, down from $12.60 billion in 8MFY22. These declines are alarming for Pakistan, whose economy is already struggling with depleting foreign exchange reserves.

The country’s central bank has only $3.81 billion in reserves, which is barely enough to cover a month of imports.

Industrialists in Pakistan have expressed concern about the ongoing slump in the textile sector. Data released by the Pakistan Cotton Ginner’s Association (PCGA) on Friday revealed that cotton arrival in Pakistan also decreased by 34.5 per cent year-on-year.

Last month, APTMA urged the federal government to implement a uniform gas price of $7 per MMBtu for the export industry throughout the country to ensure a level playing field.

APTMA also warned that the government’s decision to suspend the regionally competitive energy tariff (RCET) of electricity for Export Oriented Units (EOUs) would harm the textile industry, particularly in Punjab.

In December, APTMA wrote a letter to Prime Minister Shehbaz Sharif, warning that the country’s textile exports could fall below $1 billion a month from 2023 onwards, highlighting a range of issues affecting the sector, which is currently operating at less than 50 per cent capacity utilization.