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Saturday, April 13, 2024

Textile sector’s gas suspension to cause $1B loss: APTMA

APTMA warns that the gas suspension will result in a more than 50 percent drop in the exports of textile products in July.

The All Pakistan Textile Mills Association (APTMA) has warned that the textile sector could face $1 billion in loss if gas is not supplied to the export-oriented industry.

Patron-in-Chief Dr. Gohar Ejaz has written a letter to Prime Minister Shehbaz Sharif in which he has informed him that over 50 percent drop in the exports of textile products was feared in July on account of the suspension of the gas supply to the sector from July 1, 2022, to July 8, 2022.

“Gas/RLNG to the industry has been suspended from July 1 to July 8, following that, there would be Eid holidays from July 9-14, and a shutdown of 15 days will translate to a loss of at least $1 billion,” the APTMA chief wrote.

Read more: Pakistan’s balance of payments crisis to worsen: APTMA warns

Gohar Ejaz explained that the drop in output will lead to a real risk of losing orders on a permanent basis as well as loss of repeat business due to delays in the delivery of orders. As a result, Pakistan may then have to seek more loans to sustain its economy.

“If this momentum is lost due to energy supply and cost constraints, Pakistan will be forced to seek an additional $6 billion in loans from abroad, which under the circumstances may not even be possible,” the letter to PM Shehbaz said.

Textile industry suffering

Important to note that the textile industry has made major contributions to Pakistan’s economy. According to the data by APTMA, Pakistan’s textile exports surged 28 percent to $17.67 billion in July-May of the last fiscal year, the highest ever for the period under review.

The 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 2021. Interestingly, Pakistan’s exporting sector has the capacity to deliver over $2 billion in exports per month, however, the lack of gas supply is resulting in losses. Many textile industries in Punjab have already shut down and it is feared that more will follow.

Read more: APTMA urges government to continue RCETs for entire textile value chain

The interrupted gas supply to the industries has been affecting the exports that will impact the achievement of the $26 billion targets for the next fiscal year besides increasing unemployment.