Official data by the Ministry of Commerce revealed that textile exports fell by an alarming 61 percent in the first nine days of January. All Pakistan Textile Mills Association (APTMA) also confirmed that textile exports witnessed a steep decline.
The data revealed that Textile production decreased by $290 million in the first nine days of 2022, according to projections, with value-added textiles accounting for $213 million and other textiles accounting for $77 million. In terms of both value and volume, this loss translates into a 61 percent decline.
According to APTMA, textile mills in Punjab faced disruptions in gas and electricity supply. As a result, the textile industry faced significant losses. The suspension of gas put about 80 percent of the industry at risk of shutting down. To clarify, the disruptions delayed and backed up delivery of goods which is a permanent loss to the industry.
Figures indicate a record increase in Textile Exports by 26% during 1HFY21-22 compared with corresponding yrs. Unfortunately, gas suspension to Textile industry suffered a loss of over $250M, still managed to reach $1.64B, highest ever for Dec, compared to last year. pic.twitter.com/ZWPIZYNRlg
— All Pakistan Textile Mills Association (@APTMAofficial) January 10, 2022
Important to note, late December 2021, the government agreed on gas supply to the industry to maintain production operations considering the orders lined up given the emerging trend of higher exports.
Read more: Govt agrees to restore gas supply: APTMA
However, sources said the gas supplied to the export sector is less than 75mmcfd despite the fact that the industry is buying gas at $9 per MMBTU, instead of $6.5 mmcfd during the winters. According to APTMA, such an unstable gas supply is making it difficult to meet the export target of $21 billion for 2022.
Textile industry’s export target
Back in October 2021, APTMA expressed confidence that the textile exports will hit $21 billion in FY22. 5 billion dollars are being invested in the value-added sector of the textile industry.
SAPM Abdul Razzak Dawood revealed the investments through his Twitter account. The $5 billion investment will establish 100 new textile units in Pakistan. Out of the $5 billion investment, an estimated investment of $2 to $2.5 billion will install new machinery. Meanwhile, the remaining will be pumped in by June 2022. According to SAPM Dawood, this investment will create 500,000 jobs in Pakistan.
Furthermore, APTMA chairperson said if government policies remain consistent and long-term, then the textile sector will hopefully grow by 20 to 25% each year. As a result, within three years, Pakistan would hit the $50-billion export level.
However, the frequent disruptions in gas supply and low electricity voltages is making it difficult for the textile industry to meet its targets.