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Textile, clothing exports drop 2.5pc

Updated March 23, 2017

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ISLAMABAD: Textile and clothing exports fell 2.53 per cent year-on-year to $1 billion in February, mainly driven by lower proceeds from raw material and low value-added products such as cotton yarn and fabrics, the Pakistan Bureau of Statistics said on Wednesday.

The decline in export proceeds was also evident in rupee terms. However, exports of value-added products grew during the month, both in terms of value and quantity.

Product-wise details show that exports of readymade garments rose 5.3pc while that of knitwear grew 2pc in February. Exports of bed linen edged up by 2.7pc while those of towels fell 3.9pc in February.

In primary commodities, exports of cotton yarn witnessed a year-on-year decline of 11.5pc, while those of cotton cloth and yarn (other than cotton’s) dropped 14.8pc and 46.6pc, respectively.

Exports of made-up articles, excluding towels, increased 2.2pc and that of tents, canvas and tarpaulin grew 28.7pc. Proceeds from art, silk and synthetic textile declined 18.2pc while those from raw cotton also recorded a year-on-year increase of 13pc.

One reason why Pakistan’s exports of textile products are in decline is that the preferential access to the European Union under the GSP+ scheme hasn’t helped boost proceeds due to slump in demand.

In the eight months to February, the value of exported textile and clothing products fell 1.74pc year-on-year to $8.214bn. Overall export proceeds in July-February were down 3.9pc to $13.317bn.

Last year, the government announced a textile policy that gives a 4pc rebate on the exports of readymade garments on a 10pc incremental increase over the preceding year, 2pc on home-textiles and 1pc on fabric. No support was announced on raw material or yarn exports.

Under this policy, the government paid out Rs2.5bn to exporters in the preceding fiscal year. This shows the policy worked to some extent and promoted exports of value-added textile products.

From Jan 15 onwards, the government has not only increased the rebate to 7pc for readymade garments, but it has also allowed cash support of 4pc on yarn and grey cloth under a Rs180bn package announced by the prime minister.

One reason for the textile package — from January 2017 to June 2018 — was the need to counter the rising cost of production.

Published in Dawn, March 23rd, 2017