KARACHI: Pakistan’s textile exports surged 28 percent to $17.67 billion in July-May of this fiscal, the highest ever for the period under review, compared to $13.76 billion in the same months of last, the industry reported on Friday, warning the severe energy constraints were a major risk to the future growth of the sector.
All Pakistan Textile Mills Association (APTMA) data showed the exports of textile goods posted 59 percent growth to $1.69 billion in May 2022 against $1.06 billion in May last.
“Despite the significant growth in the textile exports, the gas/RLNG supply to the Punjab textile sector, which was at only 25 percent of required volumes (50 percent of August to November actual consumption), was shut down two days prior with the guarantee that supply would be restored on the morning of Friday June 3, 2022,” the APTMA said in a statement.
However, it has now been stated that the gas/RLNG supply will not be restored for an indefinite period, the trade body said.
“In the wake of energy supply constraints, the production of textile production has decreased by$300-400 million every month from November 2021 till today owing to which the textile exports are most likely not to touch the target of $20 billion rather exports will hover around at $19.6 billion,” Executive Director of APTMA told The News.
APTMA Chairman Rahim Nasir in the trade body’s statement said tragedy was that even with a 59 percent increase of textile exports in May 2022 exports were not being given their due importance.
“Gas/RLNG is being continuously supplied to non-export industries – ceramics, glassware, steel etc. and not the export sector, against all economic rationale.”
Nasir said the government’s decision to halt the supply of gas/RLNG to exporters was highly illogical as it was a critical input to textiles, the single largest contributor to Pakistan’s exports and the mainstay of Pakistan’s economic future.
The sector has sizable investments in state-of-the-art machinery and high efficiency generation, with over $5 billion worth of investments for expansion and modernisation made in the last one and a half years, said the APTMA chief.
“The potential losses thus accruing to the shutdown of gas/RLNG supply are phenomenal.
On the contrary, the industry can bring substantial economic benefit from enhanced exports if the stable and consistent supply of gas/RLNG is guaranteed.”
He said the new plants and expansions completed since November 2021 were still awaiting gas/power supply.
The APTMA official strongly urged the government to restore the priority of export industry and to recognise the immense losses and damage to Pakistan’s economic future it would cause.
“A loss in production will lead to a further loss of exports and the need for billions of dollars in additional loans, which are already hard to come by.”
Nasir added that due to poor quality grid electricity and non-supply of gas/RLNG, mills were operating at less than 75 percent capacity, which if continued would incur a loss of $250-400 million in exports each month down the line.
“This has occurred previously and the losses were not and can never be recovered.
Furthermore, most mills at present cannot fulfill the energy needs for power or gas/RLNG alone and require both to function.”
He said it was important to stress upon the fact that captives’ gas/RLNG usage was not consumptive but economic.
“It leads to sustained production, with benefits of employment generation and enhanced exports.
He said that the textile sector required unwavering support to maintain export-led economic growth, so the sustained provision of energy would have long-term benefits for the country at large.
“Pakistan cannot afford to have an inefficient export-oriented sector, and the gas/RLNG supply and priority must be restored with immediate effect so that exports and economic growth
are able to continue on an upward trajectory,” the APTMA chairman added.
