Pakistan’s textile exports during the initial 11 months of FY 2022-23 amount to $15.01 billion, indicating a decrease from the $17.61 billion recorded in the corresponding period last year. On a monthly basis, exports experienced a decline of 20 percent, with May 2023 reflecting $1.31 billion in contrast to $1.64 billion in May of the previous year.
Analyzing the 15% Decline in Textile Exports: July-May FY2022-23 Report
The textile exports showcased growth during the first three months of the current fiscal year, spanning from July to September. July witnessed a 1 percent increase, August an 8 percent rise, and September a 3 percent surge when compared to the corresponding months of the previous year. However, this positive trend was short-lived, as exports started a downward trajectory from October 2022, with a 15 percent decrease, ultimately plunging to a 29 percent decline in April 2023, as reported by The News.
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Furthermore, from November 2022 to January 2023, the export figures experienced consecutive drops. November marked an 18.39 percent decrease, followed by a 16.05 percent decline in December, and a 15 percent dip in January. The steepest decrease occurred in February 2023, with a significant 30 percent reduction, which coincided with the government’s announcement of a stringent mini-budget.
The All Pakistan Textile Mills Association (APTMA) anticipates a substantial decline in exports, amounting to $3 billion when compared to the previous year’s record of $19.4 billion. It is important to note that this estimate does not account for the potential increase resulting from newly installed capacity. APTMA attributes this ongoing decline to the ban imposed on the import of raw materials and spare parts, which are crucial necessities for the industry.
The lack of adequate and affordable energy supply, along with the malfunctioning sales tax refund system, has further added to the decline in industrial output, leading to the closure of 50 percent of the industry. Additionally, banks are unwilling to issue Letters of Credit or facilitate cash transactions for the import of cotton or PSF (Polyester Staple Fiber) through document retirements. As a result, industrial stocks are depleting rapidly.