Pakistan’s textile sector exports witnessed a significant decline of 12.4%, clocking in at $1.36 billion in January 2023 in comparison to $1.55 billion recorded in the same month of the previous year, showed provisional data released by the All Pakistan Textile Mills Association (APTMA) on Thursday.

It added that the country’s textile exports in the first 7 months of FY23 decreased by 8% to $10.08 billion, declining from $10.93 billion recorded in 7MFY22.

The decline in textile exports is concerning for the South Asian economy, which is already facing depleting foreign exchange reserves. Its central bank has reserves of just $3.7 billion remaining, barely enough for three weeks of essential imports.

Earlier, in an opinion piece for Business Recorder, Asif Inam, Chairman APTMA, said the textile sector, the single largest manufacturing sector of Pakistan, is confronted with numerous challenges.

“Worsening international economic situation primarily caused by the Ukraine crisis combined with floods in Pakistan has negatively impacted the already inefficient supply chains of the country. Flooding in dozens of districts of Pakistan has destroyed a wide swath of agricultural land,” he wrote.

“While the industry requires 14 million bales, the country could only produce 5 million bales of cotton domestically.

“To meet this gap cotton needs to be imported; however, the forex issues in the economy have curtailed imports of cotton and other essential inputs for exports. The issue of raw material clearance from the ports remains unresolved owing to unavailability of forex and therefore mills are currently unable to obtain cash against documentation and are closing down owing to the shortage of raw materials,” he added.

Back in December, APTMA wrote a letter addressed 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 facing the sector that is currently operating at less than 50% capacity utilisation.