Textile exporters have feared to face $0.5 million loss per month in case of closure of the textile industry due to power and gas load-shedding. A high level meeting will be convened today (Tuesday), with Federal Minister for Textile Industry Rana Farooq Saeed Khan in the chair and leading textile exporters will attend the meeting.
A leading textile exporter revealed to the Business Recorder that due to electricity load shedding textile exports have dropped by 5 percent to $1.351 billion against the set target of $1.425 billion for July-November 2008. The textile export stood at $1.419 billion in the corresponding period of the last year.
He said that textile industry was now facing both gas and electricity load shedding that would result in further drop in textile exports. He said that if current situation of power and gas load shedding continued, the country would face $0.5 million loss per month in textile exports.
He said that total export of Pakistan textile products including bed wares, garments towels and raw cotton stood at $10.530 billion during the last financial year and the country would hardly achieve half of the last year's textile exports due to gas and power load shedding.
At present, farmers are facing tough situation to sell lint cotton and there are no buyers. He lamented that some textile units had closed down due to gas and electricity load shedding and therefore textile mills were not buying the cotton bales from the ginners.
Textile exporters are facing reduction in purchase orders from American and European Market due to financial crisis that would result in failure to achieve the export target. He said that most of the factories are going to shut down, as it is difficult to meet the purchase order.
He said that due to financial crises, America and Europe, which was the greater purchaser of textiles, are losing their interest and pressing to decrease the prices of garments and other value-added products related to textile sector. He said that Pakistan exports 50 percent of apparel to America, 40 percent to Europe and 10 percent to other countries. He said that due to the prevailing terrorist attacks they are already reluctant to come here and asking us to come to Dubai for taking purchase orders.
He said that China gives 14 percent tax rebate while Bangladesh gives 15 percent discount on the purchase of local fabrics but unfortunately we pay 7.5 percent bank markup against the other countries for which 3 percent mark up is available. He lamented that government gives subsidy on fertilisers but there is no subsidy for the textiles. He demanded of the government not only to finance the textile sector but also reduce bank markup on the loans for textile industry.
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