The exports of textiles and clothing shrank for the fifth consecutive month in a row. According to the data released by the Pakistan Bureau of Statistics (PBS), the exports dropped to $1.32 billion in January compared to $1.55 billion last year.
The drop in overall exports shows that the government would find it difficult to achieve the export target this fiscal year, leading to more pressure on the foreign exchange reserves of the country.
Moreover, the exponential decline in textile and clothing exports over the past five months is due to high energy costs, stuck-up refunds, and a slump in global demands despite massive rupee devaluation.
Exporters believe that one of the main reasons behind declining exports was the exchange rate instability. Similarly, the discontinuation of duty drawbacks on local taxes and levies by the government has also created liquidity issues for the export sector.
Furthermore, as part of the IMF $7 billion bailout program, the government has announced discontinuing subsidies on energy from March for the export sector. Likewise, the piling of containers at ports is also largely affecting the textile industry.
On the other hand, no official statement was issued from the commerce ministry on the continuing decline in export proceed.
Data released by PBS
The PBS data suggests that the exports of readymade garments recorded a negative growth of 11.47% in value but grew by 32.26 % in quantity in January. Meanwhile, the knitwear dropped 13.10% in value and 13.54% in quantity and the bedwear experienced a negative growth of 20.05% in value and 15.83% in quantity. Likewise, cotton cloth dipped by 26.70% in value and 30.86% in quantity.
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Additionally, the exports of primary commodities also declined. The exports of cotton yarn fell by 12.34%, while yarn other than cotton dipped by 40.08%.