Fabrics and bedware exports, stumbling over the past seven months, are going the way of knitwear sector disaster, if immediate damage control is not set in motion, warned Arif Tauseef, Chairman, Pakistan Textile Exporters Association (PTEA), in a statement here on Wednesday.
He said that textile quota phase-out and opening of world-wide markets for Pakistani products had presented a combination of opportunities and challenges for the Pakistani textile exporters. Having fully prepared for the challenges of new world trade order by upgrading the manufacturing and production lines through balancing, modernisation and replenishment of their machinery the textile exporters had geared up to exploit the opportunities presented by the international free market scenario.
Accordingly, the first 6 months of new world trade order (January-June 2005) saw a buoyancy in textile exports, spurting from 211 million square metres in January 2005 to 329 million square metres in June 2005. Similarly, the value of exports increased from $163 million in January 2005 to $237 million in June 2005.
There was thus a happy upward trend in the 6 months immediately after the textile quota phase-out. A dramatic downslide, however, started in the second half of 2005 with fabric exports plunging from 302 million square metres in July 2005, temporarily rising to 194 million square metres in December and going down again to 182 million square metres in January 2006.
Similarly, value-wise the exports of fabrics registered a decline from $207 million in July 2005 to $154 million in November 2005 and, after a temporary increase to $172 million in December, again declined to $164 million in January 2006.
Regarding exports of Bedware the growth during the year fluctuated on similar lines from 21.9 tons in January 2005 to 22 tons in November 2005 and value-wise from $194 million in September 2005 to $152 million in January 2006.
The above figures clearly reflect the uncertain and erratic course of the exports of fabrics and bedware. The opportunities presented by new world trade order are being lost and the textile exports are not growing according to the potential and the preparation made for the new trade order, he said. Pinpointing the causes for the disappointing performance of fabrics and Bedware exports sector, Arif ascribed the heavy export refinance rate in the country at 9 percent vis-à-vis 5.25 percent in India and other countries in the region. The cost of production in the country had also escalated highly with intermittent rise in electricity, gas, petroleum and other inputs compared with far lower utility charges in Bangladesh, Sri Lanka, India and China.
The PTEA Chairman also lamented sudden changes in policies such as heavy reduction in duty drawback without allowing existing stocks and cut-off date for sales tax stocks after zero-rating of sales tax.
Yet another discriminatory burden on Bedware exports was the anti-dumping duty still being charged at 13.1 percent despite proposal for reduction announced by EU and heavy customs duty of 9.5 percent on Pakistani textiles in EU.
He said that exports of knitwear sector have already collapsed and the knitwear industry is in complete crisis. Arif Tauseef warned that if immediate remedial measures are not set in motion the exports of fabrics and Bedware sectors would plunge resulting in the same crisis as being faced by knitwear.
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