Christmas, New Year season ‘Rising production costs have slashed textile exports’ share by 24pc’

KARACHI: The galloping production cost and sledgehammer economic policies of the former PDM rule are seen as the primary hurdles that divested Pakistan of its 24 percent textile export share on the world markets for the Christmas and New Year 2023 season, exporters said on Thursday.

The production of further export orders are at stake because of the highest ever energy cost, as exporters feared that the country may not be able to ship its committed consignments on time for the Christmas and New Year festivals this year.

They said that the country’s textile apparel sector grappled with challenges one after the other from the free-fall of rupee against the dollar, gas and power tariffs historic surge to the LCs restrictions that pulled down its output and export phenomenally.

“Only the past three months from August till October 2023 saw a significant fall of 24 percent in the value added textile export this year,” Muhammad Javed Bilwani, Chairman of Pakistan Apparel Forum told Business Recorder.

The exorbitant manufacturing cost has made it unviable for the textile export sector to operate, he said and showed disappointment that the country’s struggling industry may not be able to complete orders for the Christmas and New Year festivals this year.

“Textile export orders for the Christmas event, which is celebrated worldwide are normally processed and completed from August till October,” he said that the textile sector lost its 24 percent stakes for the global festival in 2023.

He also criticised the last PDM government’s impactful economic policies, which topped with the LCs restrictions for imports of raw material mainly aimed for the manufacturing of export goods, saying that “the exports fall began from then onwards”.

The shooting up of dollar value against the timid Pak rupee, he said to have unleashed the highest ever inflationary trend, making the raw material costlier than ever. The raw materials become unviable for manufacturing, he added.

And the last factor, he highlighted as the soaring gas and power tariffs to the historic highs in the country, which he believed, has left every manufacturing sector in a complete chaos, scaling up cost and plunging returns. He called the utilities tariffs hike “unprecedented”.

“The fresh surge in the gas rates by 156 percent to Rs2100 per mmbtu for the industry under the interim government is now likely to injure the already dwindling textile industry,” Bilwani said that the gas was made thrice costlier within a year.

The government financial support as a cross-subsidy on the gas tariffs for the domestic users, fertilizer sector and the IPPs has also burdened the textile sector largely, forcing it to pay higher rates for the utility, he added.

“The rising energy cost with the fresh record hike in the gas rates has also left the textile manufacturing sector uncompetitive on the global markets,” he said, warning the government of its sledgehammer economic policies will further plunge the export.

Copyright Business Recorder, 2023