Energy shortage: textile exporters fear 30 percent decline in exports this year

Textile exporters fear a decline of 30 percent ($4 billion) in textile exports this year due to severe energy shortage. Textile exports are likely to be no more than $10 billion during the current year as compared to $14 billion in the preceding year, said Gohar Ijaz former Chairman All Pakistan Textile Mills Association (Aptma).
Talking to Business Recorder, Ijaz said that "Textile production is likely to decline by 30 to 35 percent due to 3 days of loadshedding a week". Export target of $14 billion was set for the current fiscal year, however, this target is unlikely to be met if gas loadshedding on the current scale continues, he added.
Last year the textile sector faced gas loadshedding for two days a week, however, during the current fiscal year 2011-12, it was being curtailed for 3 days that could result in considerable reduction of textile exports, said Ijaz, adding that about 80 percent of the industry (6000 units) located in Punjab would be the main sufferers.
Gohar revealed, "The textile industry receives export orders mostly in winter season due to arrival of Christmas and the New Year and unfortunately it is this very period when gas load shedding is at its peak. We receive export orders mostly in the beginning of the month of September that we have to export well in time for Christmas but due to gas shortage we fail to meet deadlines of our clients."
He said, "Obviously the foreign importer whose export order is not filled within a specific time period would divert his order to another country like India and Bangladesh next year. Therefore, every year, the country loses export orders worth millions of dollars and this issue is still unsolved due to the government's negligence in realising that the textile industry, the major foreign exchange earner of Pakistan, is being forced to operate at well below capacity due to gas loadshedding."
According to Gohar Ijaz, the textile industry employs 15 million workforce while 80 percent of the textile industry is dependent on gas-based captive power plants. The textile industry is currently facing financial crunch, leading to bankruptcies in the industry.
Well-placed sources in the Oil and Gas Regulatory Authority (Ogra) told Business Recorder that as per the gas agreement, the textile sector would get gas for only nine months a year and in the winter season, when domestic consumption upcountry increases manifold, the textile sector is supposed to switch to alternative fuels such as diesel and furnace oil etc that are three times costlier than gas that affects the competitiveness in international market.
Sources said that current gas production in the country is over 4000 million cubic feet per day (MMCFD). Total gas supply to Balochistan during winter 2011-12 is 706 MMCFD, KPK 350 MMCFD, Punjab 197 MMCFD, and Sindh is 2636 MMCFD. Total share of Balochistan in gas supply is 18percent, KPK 9%, Punjab 5% and Sindh is 68 percent. Gas consumption in Balochistan is 300 MMCFD, 202 MMCFD in KPK, 1713 MMCFD in Punjab and 1608 MMCFD in Sindh.
Analysts however argued that the textile sector should protest against gas supply interruption in winter instead of switching to alternative fuels. In the current month total gas demand by SNGPL and SSGCL is estimated at 3831 MMCFD while supply is 2968 MMCFD with a shortfall of 863 MMCFD. It has been projected that in January total demand of gas from SNGPL and SSGCL would be around 4083 MMCFD while total supply is estimated to be 3012 MMCFD which indicates a shortfall of 1076 MMCFD.