PTEA suspects rising financial & energy cost for textile crisis
23 Nov '06
3 min read
Pakistan could now be confronted with a severe textile crisis after exports fell 7.80 per cent in US$ terms in July. Yarn exports continue surging, but sales of apparel, bed linen and cotton fabrics are declining, in sharp contrast with the boom experienced in the first sixteen months without quotas.Rising energy and financial costs would be behind the current difficulties, textile associations said.
After surging in the first year of the post-quota era, Pakistani textile and clothing exports are now surprisingly falling.
According to official data that were released at the end of August, total textile and apparel exports were down 7.80 per cent in July from the same month last year.
Shipments to foreign countries fell from US$850.61 million in July 2005 down to US$784 million in July 2006.
This is extremely worrying for the Pakistani economy that heavily relies on its textile industry.
End of post-quota euphoria
Although on the decline, textile and clothing exports still accounted for 64 per cent of total shipments in July.
The July decline actually confirms data that were released in the past months.
Textile exports were still up 12 per cent in US$ terms in May before only rising 1.15 per cent in June.
The post-quota euphoria that saw a double-digit growth in textile exports is now over.
In July, shipments of "readymade garments" were down 7.50 per cent in US$ terms while exports of cotton fabrics and bed linen decreased by 12.55 per cent and 9.61 per cent, respectively.
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