Pakistan losing textile market

Low production and lost textile export orders have lowered Pakistan’s ranking in the region. Energy crisis and US-EU economic problems are the key cause of the otherwise booming textile industry, which normally contributes 55 per cent to overall exports, and provides jobs to 38 per cent of all labour force.

Published: Mon 26 Mar 2012, 10:01 PM

Last updated: Thu 2 Apr 2015, 9:45 PM

Worries of the business recession abroad have been complicated further because of lower domestic production, on the back of the continuing energy crisis and prolonged outages of natural gas end electricity. Textile production inched up merely 0.85 per cent during the first seven months of current fy-2012, compared to an overall growth of 1.26 per cent recorded by the large scale manufacturing (LSM) industry, compared to the like period of FY-2011, reports Federal Bureau of Statistics (FBS).

While textile industry is suffering all-round, cotton yarn exports are down 18 per cent, in July-January period of FY-2012, compared to the like period of FY-2011, All Pakistan Textiles Mills Association (Aptma) says.

Knitwear export declined 24 per cent, towel exports are lower by 20 per cent, but fabric exports remain flat.At a time when the world is looking more and more towards Asia to meet its textile demand, stagnation in investment, high lending rates of the banks, and the energy crisis have hurt Pakistan’s ranking as compared to China, India and even Bangladesh. This is unveiled in a report prepared by Aptma.

The Aptma says, China with its textile exports of $212 billion, is far ahead of the other three, competing countries of the region — India, Bangladesh and Pakistan. China is followed by India with exports totalling $23.42 billion, Bangladesh $20.22 billion, while Pakistan trails at $13.80 billion a year according to the latest annual data.

What is the situation of raw materials availability? China is the biggest producer and consumer of raw cotton, globally, India follows it, Pakistan is fourth largest grower of raw cotton and the third biggest user. Bangladesh, which hardly grows any cotton is the net importer of raw materials for its textile industry.

Aptma chairman Ahsan Bashir cautions: “Pakistan should take a cue from Bangladesh which is fast emerging as a major textile player after China.” Bangladesh, the former Eastern province of Pakistan which broke away in 1971, had hardly had any textile industry until even late 1980s is coming up fast. “It started exporting textiles in 1990s, overtook Pakistan four years ago, and is poised to challenge India in a few years’ time.”

What is the secret of Bangladesh success? It is attributable to what Bashir says “the enabling environment and the facilitation provided to the Bengali entrepreneurs by their government.” The government gives priority to the textile industry in supplying gas and electricity. Bank credit is subsidised, besides subsidies to promote exports. Bangladesh textile exports into EU are zero-rated. The enabling environment has helped Bangladesh export textiles to the US market, too.

On the other hand, lack of such facilities for the Pakistani textiles are hurting the industry.