KARACHI, Dec 17: A 16.5 per cent increase in export of textile products in last five months has not brought much joy to Pakistan’s fabulously rich textile tycoons who now blame dwindling international prices, sinking dollar and rising utilities cost for giving them very poor return in business.

Exports have shown encouraging performance in terms of volume and realisation of total proceeds. But when it comes to average unit prices of many textile products in the international market, exporters complain of getting much less than what they used to get in the past. It means they have to invest more to produce more and meet export market demand but are getting a far less return.

Not only that prices of textile products are showing declining trend in international export markets, cotton is also not fetching good price despite reports of crop failure in a few cotton growing countries. This year Pakistan has exported a big quantity of cotton, more than 500 per cent over last year, but the average unit price has shown a decline of almost 16 per cent.

In last five months—July to November 2002—Pakistani textile export products fetched $2.76 billion as against about $2.4 billion dollars in same period last year. It shows more than 16.5 per cent rise in dollar earnings.

Translated into Pakistani rupee, this export shows only an increase of 9.3 per cent as total proceeds stood at Rs163.64 billion this year as against Rs146.71 billion in five months last year. An erosion of 6.7 per cent in dollar value in last one year has robbed rich tycoons of about Rs15 to Rs17 billion.

Official statistics show that average export unit price of Pakistan cotton has come down to $751.82 a ton this year as against $892.30 last year. It is 15.74 per cent less than last year.

Cotton yarn, a key textile product on which tycoons thrive, is down by almost 5 per cent in international export market this year. Its average unit export price this year is down to $1.71 kg as against $1.80 a kg last year.

The most pronounced fall of about 25 per cent in export prices have come in case of knitted croached fabrics.

Obviously, the all pervading recession in the US, Europe and Japan has brought down the prices of clothing and textile products. But exporters speak of the problems created for them back in home.

“With fall in dollar exchange value, the rate of duty drawback has been reduced,” Aziz Memon a top garment exporter and Chairman of Quota Supervisory Committee remarked. He said quite a good amount of exporters refund amount is always stuck up with taxation authorities.

Add to this the rising utilities cost has badly affected cash flow problems. In last three years the KESC pushed up tariff 13 times. WAPDA should not have been left much behind in this revenue generation spree. The rising petroleum cost has struck hard business enterprises.

Anwar Tata, a former Chairman of All Pakistan Textile Mills Association said that he was finding hard to market his surplus yarn which he has spun. According to him Pakistani mills spin over 120 million kilograms of yarn. Of this hardly 70 million kilograms is consumed locally and rest has to be marketed.

Dislocation of textile industry from Japan and now from the US is a big problem. The Japanese and US investors are now bringing textile industry in China and partly in India where cotton is in abundance and labour is cheap. Pakistani yarn spinners and exporters are now in lurk looking for markets.

“Textile industry is in deep crisis,” Anwar Tata said who wants government’s quick attention to attend to this issue before it gets too late.

But sinking dollar has come as a blessing in disguise for Pakistan’s foreign exchange reserves. A fear of further drop in dollar exchange value now force exporters to realise their proceeds at earliest and get it remitted back home to their banks. For years nay decades exporters were notorious for retaining their proceeds abroad. Only till last year, the State Bank of Pakistan Governor had been complaining openly of exporters refusing to bring their proceeds home.

Bankers say that a big amount of remittances now flowing in Pakistan through banking channel represent the held up proceeds of Pakistani exporters mainly those who deal in textile exports.