LAHORE: The decline in export of two major basic textile commodities – cotton yarn and cloth – over the last two months is in proportion to the acute energy shortages in Punjab, new export data released by the Pakistan Bureau of Statistics (PBS) shows.

Overall, textile exports from the country spiked slightly by just below 6pc to $12.6 billion in the July-May period. Compared with this 11-month increase, the rise in textile exports slowed to less than 2pc in May.

The primary factor behind decrease in the May growth rate was a sharp drop of 27.5pc to $145 million from $201 million a year ago in the cotton yarn exports and 6.33pc fall in cotton cloth exports to $227 million from $243 million.

In April, textiles had posted a negative growth of 6pc to $1 billion from $1.1 billion a year earlier with cotton yarn exports plunging by 30pc to $134 million and cotton cloth by 7.4pc to $238 million.

“There obviously is a direct link between the declining yarn and cloth exports and energy shortages the large-scale textile industry in Punjab is facing,” noted Dr Shahid Zia, a Lahore-based financial and capital market analyst.

Compared with last year, gas supplies for large-scale textile producers in the province have been cut from 17 hours a day to eight hours and power cuts increased to around 10 hours.

“The decline in cotton yarn export of 30pc in April and 28pc in May is more or less equal to the energy shortages for the industry in Punjab,” Dr Zia concluded.

Textile exporters had done much better during winter when the government ensured gas supplies to the industry in Punjab in spite of growth in its domestic demand because of drop in temperature. Massive gas cuts for captive generation by the industry, unannounced power blackouts and hefty increase in electricity price have not only spiked the cost of doing business in Punjab but also made its industry uncompetitive compared with its counterparts in Sindh and Khyber Pakhtunkhwa. In both these provinces, the industry is getting uninterrupted gas supply.

“The textile industry in Punjab had grown rapidly in the late 1980s and early 1990s because of the business-friendly policies of the Nawaz Sharif governments in Punjab and Islamabad. Now it is his government that is turning the province into a graveyard of factories,” an angry exporter remarked.

“We require an additional 200mmcfd of gas supplies to protect our exports of around $2.5 billion and thousands of jobs, as well as stay competitive. But the government is not giving it to us.”

When pointed out that the government had diverted gas to power producers to overcome electricity cuts, the anonymous exporter replied: “What’s the use of it? You take gas from us, produce electricity – 30pc of which is wasted during transmission and distribution or stolen – and give us a small part at more than double the cost at which the industries in Karachi and Peshawar are generating electricity from gas for their operations. And at what cost? Production is falling, exports dropping and redundancy increasing. Is this what the government wants?”

Published in Dawn, July 2nd, 2014