ISLAMABAD: Pakistan’s textile and clothing exports fell 0.92 per cent year-on-year to $10.29 billion in July-April mainly because of lower proceeds from raw material and low value-added products, such as cotton yarn and fabrics.
Data released by the Pakistan Bureau of Statistics on Monday showed the decline in export proceeds was also evident in rupee terms.
Exports of value-added products grew during the 10 months in terms of both value and quantity.
Product-wise details show exports of readymade garments rose 5.34pc while those of knitwear dropped 0.17pc in July-April. Exports of bed-wear edged up 5.01pc while those of towels fell 4.38pc.
In primary commodities, exports of cotton yarn witnessed a year-on-year decline of 3.68pc while those of cotton cloth and yarn (other than cotton) dropped 5.73pc and 29.48pc, respectively.
Exports of made-up articles, excluding towels, increased 1.18pc and those of tents, canvas and tarpaulin grew 56.22pc. Proceeds from art, silk and synthetic textile exports declined 29.70pc while exports of raw cotton also recorded a year-on-year decline of 47.58pc.
One reason for the decline in Pakistan’s textile exports is that the preferential access to the European Union under the GSP+ scheme hasn’t boosted proceeds due to a slump in demand.
In April, the value of exported textile and clothing products fell 0.41pc year-on-year to $1.025bn.
Overall export proceeds in July-April were down 2.29pc to $16.91bn.
Last year, the government announced a textile policy that gave 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.
Jan 15 onwards, the government has not only increased the rebate to 7pc for readymade garments, but also allowed cash support of 4pc on yarn and grey cloth under a Rs180bn package announced by the prime minister.
Food, oil imports: Pakistan’s food, oil and machinery import bill rose nearly 31pc year-on-year to $23.71bn in the first 10 months of the current fiscal year.
The share of these products in Pakistan’s total import bill in July-April was 55pc, which is putting more pressure on the country’s balance of payments. The trade deficit is widening as the overall import bill has been on the rise since the start of 2016-17.
Overall petroleum imports increased 31.3pc to $8.76bn. Of these, imports of petroleum products went up 32.42pc to $5.49bn in the 10-month period. An increase of 6.63pc was recorded in the import bill of petroleum crude.
The import bill of liquefied natural gas surged 129.17pc while that of liquefied petroleum gas recorded growth of 35.59pc.
The second biggest component in the import bill was food commodities whose imports rose 16.68pc year-on-year to $5.09bn in the first 10 months of 2016-17.
This increase has been attributed to massive imports of palm oil worth $1.55bn followed by ‘other’ food items $1.70bn, pulses $834.45 million and tea $452.28m. Imports of dry fruits and milk products also grew during the period under review.
The import bill of machinery surged 39.25pc to $9.85bn mainly because of power-generating machinery, followed by office, textile, construction and electrical machinery.
However, negative growth was witnessed in the import bill of the telecom sector because of an increase in the import duty on mobile phones and other apparatus.
Economic managers are trying to control the impact of an increase in capital goods’ imports under the China-Pakistan Economic Corridor.
The State Bank of Pakistan (SBP) recently imposed 100pc cash margin on the import of a number of items. This means banks now require importers to furnish foreign currency for the full purchase amount in advance on about 400 imported consumer goods, including vehicles, mobile phones and home appliances.
Published in Dawn, May 23rd, 2017