Revival of textile industry

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All Pakistan Textile Mills Association (APTMA) has announced that the textile industry is all set to invest $5 billion by adding 100 new textile plants which will help create 500,000 jobs for the youth of the country beside increasing the existing volume of textile exports.
The APTMA as a trade organization representing the largest sector of Pakistan – Textile – encompassing more than 400 textile companies has always played a pivotal role in safeguarding the business interests of not only textile companies but of other sectors to enable their contribution in country’s economic prosperity.
According to the data, the State Bank of Pakistan has provided financial support to the industry through Temporary Economic Refinance Facility (TERF) and Long Term Financing Facility (LTFF).
The TERF showed significant growth until March 2021 as reflected by increase in the requested amount from Rs. 36.1 billion by end of April 2020 to Rs. 690 billion at maturity while over the same period approved financing has reached to Rs. 435.7 billion from mere Rs. 0.5 billion.
According to official source, “For every dollar investment in the textile industry, there is $1 to $1.5 increase in the exports expected.” It stated that the textile sector exports reached a new peak, recording $1.49 billion during the first month of the current fiscal year 2021-22.
The recent expansion is attributed to unprecedented investment in expansion and new projects – a direct consequence of the government’s regionally competitive energy pricing policy. The export-oriented sectors are highly labor intensive – particularly the textile sector – and create jobs at every tier of the economy, it added. According to the available data, the textile industry has witnessed an unprecedented growth as depicted by an increase of 22% in exports in FY21 as compared to FY20 and 15% when compared to FY19. The resulting hike in exports was the direct result of enabling environment provided by the current government.
It is pertinent to mention that FY20 was the year of Covid-19 where prices plummeted due to black swan event. Thus, we must compare prices with previous year i.e., FY19 where A-index prices decreased by 4.24 percent from 86.07 in FY19 to 82.42 in FY21. Given the fact that orders and prices are booked 6-8 months in advance, the earnings is certainly not the result of increased prices.
According to officials the demand in the domestic market maybe on the rise and there are more than 400 textile mills in the country – not all of them are exporters – to cater for rising demand. It is only viable to sell a value-added product for dollars rather than rupees. Those hard-earned dollars have significantly contributed to Pakistan’s economic growth – Balance of Payment (BoP) improved, rupee appreciated, and it also funded our imports.
The exports of textile commodities surged by of 28.67 percent during the first two months of the current fiscal year as compared to the corresponding period of last year and surged by 45.19 percent on year-on-year basis (YoY). The textile exports were recorded at $2933.938 million in July-August (2021-22) against the exports of $2280.119 million in July-August (2020-21), showing growth of 28.67 percent, according to latest data of Pakistan Bureau of Statistics (PBS). The textile commodities that contributed in trade growth included cotton yarn, the exports of which increased from $115.136 million last year to $193.389 million during the current year, showing growth of 67.97 percent.

Likewise, the exports of yarn cotton cloth increased by 24.74 percent, from $294.724 million to $367.624 million whereas, exports of cotton (carded of combed) increased by 100 percent to 0.770 million.

The exports of yearn (other than cotton yarn) increased by 123.73 percent, from $3.473 million to $7.770 million whereas the exports of knitwear went up by 34.12 percent, from $564.343 million to $756.883 million and bed wear by 24.50 percent, from $424.187 to $528.109 million.

The exports of towels during the period under review increased by 20.67 percent, from $133.104 million to $160.612 million, ready-made garments by 22.57 percent, from $477.216 million to $584.913 million, art, silk and synthetic textile by 34.08 percent, from $51.613 million to $69.202 million, made up articles (excluding towels and bed wear) by 21.26 percent from $109.846 million to $133.194 million whereas exports of other textile materials increased by 37.44 million, from $86.743 million to $119.222 million.