Pakistani Exports to go down
The textile sector in Pakistan is anticipating a drop of at least 30% in the value of exports after the recent floods wiped out much of the country’s usually plentiful cotton crop, and the sector is seeking out strategies to buy cheaper cotton abroad.
Last Fiscal year Pakistan Exported US$21bn, According to Textile Mills Association (APTMA), but now, due to the damage caused by flooding, industry experts fear a probable cancellation of many export orders by international brands.
With Sindh province being dominant in cotton production, southern parts of the Punjab province and parts of Baluchistan being flooded, the APTMA and other industries fear the textile and garment exports may fall from shrinking production and increased costs, with APTMA noting this will hit “the government’s vision to achieve the export volume of US$50bn in the coming years”.
With the view to fostering exports and boosting the economy of the country, last month (August) APTMA unveiled a plan to launch a roadmap to achieve US$50bn in exports by increasing the country’s stitching-focused clothing manufacturing sector to process an additional US$3bn worth of yarn and fabrics. In this way, it would boost Pakistan’s value-added garments for export, generating an additional income of US$10bn.
The Pakistan Textile Exporters Association has suggested to the Government officials to allow cotton imports from neighboring India as it would be cheaper compared to cotton imports from Central Asia countries and other locations. However, the government has yet to take a decision in this direction.
The problem here is that Pakistan suspended trade with India after New Delhi abolished the autonomous (and disputed) state of Jammu and Kashmir in 2019 and replaced it with two union territories with less powerful local governance.
The government is also dealing with annual inflation of 27.2% (as of August) and high-interest rates (15%). These floods also followed torrential rains that hit one-third of the country, damaging crops, roads and communication networks. Pakistan media reports have estimated the damage caused by these floods at US$12.5bn.
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