Pakistan noted a fall of 2 per cent in textile exports during June 2018. The drop was seen despite the government efforts to boost shipments in order to reduce trade deficit.
In June, Pakistan exported textile worth US $ 1.19 billion as compared to US $ 1.22 billion of shipment in the same month of 2017. The product categories such as garments, towels and bedwear showed dismal performance and fell in their respective shipments.
The fall can be attributed to significantly higher cotton prices in 2018 which hampered the growth of exports. The prices are said to increase from US $ 50.38 per maund in 2017 to US $ 73.64 per maund in 2018.
The cotton prices too surged in the world market but by 22 per cent as compared to 40 per cent in case of Pakistan due to rupee depreciation since December 2017. The depreciation made cotton exporters give some reasons to cheer upon but, as far as the domestic market is concerned, the cotton dealers were far behind from being profitable.
According to a research analyst Ahmed Lakhani, “The international market is highly competitive and if cost increases, our textile exporters will be unable to pass on the impact.
It’s worth noting here that Pakistan government has extended the Prime Minister’s Export Package to boost the textile exports, to restrict rapidly growing trade deficit as well as to support falling foreign currency reserves in last one and half year. Despite these efforts the exports fell and it’s a serious matter of concern for the country.
“Textile exporters will struggle in the days ahead in the current fiscal year 2018-19 as cotton sowing target has been missed. Additionally, duties and taxes have been re-imposed on cotton imports, which will be costlier, also due to the US dollar’s strengthening against the rupee. In the meantime, expensive re-gasified liquefied natural gas (LNG) has forced the closure of several small mills in Punjab,” opined Lakhani.