The county’s most valuable exchange earning sector Textile is reeling under severe crisis and the situation is so alarming that it is on the verge of default. According to APTMA, the industry is facing severe shortage of raw material i.e., cotton bales. Currently only five millions bales are available against the requirement of fourteen millions bales. The gap is more than doubled and together with other issues like power and gas crisis and high production cost, it can let the valuable sector completely down in the post floods and prevailing economic situation.

Moreover, the import restrictions together with capital shortage are other factors taking toll on the textile industry.

As a matter of fact, our textile industry is also badly hit by the summer massive floods as one-third of our cotton crop which is considered to be cash crop for Pakistan, has been damaged by abnormal rains and flash floods. The impact of the floods is so mammoth that financial experts say that our textile exports can shrink by a whopping 35 per cent due to the crisis in the industry caused by unavailability of cotton raw material for industries in  coming months.  On the other hand, this very vital sector which is our main source of foreign exchange in the form of finished and non-finished products, is also going to suffer a substantial loss in terms of exports as sixty per cent of its products go abroad while the sector will not be able to produce that much products due to unavailability of raw material.

While the remaining forty per cent products meets the local demands but due to the inflation and the overall economic melt-down, it is also facing a crisis on the local front as currently the demand in the domestic market for textile goods has fallen badly due to dire economic conditions.

It may be recalled here that our exports were set to increase over $2.8 billion during the current fiscal year on the heel of encouraging figures of  $2.51 billion exports last year.  Everything was heading in the right direction, but the abnormal rains and subsequent flash floods wreaked havoc with the cotton crops due to which all our hopes were dashed to ground and now it is almost impossible to maintain that momentum in exports for the time being.

Only a mega incentive package can save this sector from the current situation. On the other hand, our textile industry is also reeling in pain due to high prices of power and that also badly hit the exporters and many factories were also shut down in the post floods situation due to high power prices.

The situation is so griming that the industry is proceeding with half production capacity due to which it is feared that exports will be badly hit and may be less than $1billion from January onwards.

On the other hand, the country is reeling under foreign exchange crisis which has also affected the textile sector along with other markets and due to devaluation of Pak rupees, the imports are on the downslide.

In the prevailing pathetic and uncertain situation, the exporters are in a fix and are shying away from booking new export orders. On the other hand, the capital shortage is also an issue gnawing at the root of the textile sector and as per latest report, the  sector is short of capital as our rupee has devalued by a massive 60% against US dollar as compared to previous year. Due to shortage of capital, the textile industrialists are unable to go ahead with payments for refunds. In a nutshell, the entire supply chain is in doldrums, taking toll on the industry’s production and export orders.  It may also be recalled that some industrialist have taken loans form the bank and as per available reports, five billion new investment was done in this sector by establishing new factories in the post floods situation but now in the aftermath the current situation, these individuals may not be able to pay back and the banks are also said to be affected if timely steps were not ensured by the government’.

Against this backdrop the All Pakistan Textile Mills Association (APTMA) has sought the Govt help by sending SOS to the Prime Minister to intervene and take note of the worsening situation emerging out of the power and gas supply shortages to the industry, non-availability of raw material, and the entire disruptions in the supply chain which has sent the sector on the verge of destruction.

Another report says that our textile sector industrialist set up various factors before floods but after the floods the economic situation worsened and  still the imported machinery for these factories is lying at the Karachi port as the industrialists are unable to open letters of credit (LCs) which is also one of the major issue.  And APTMA is of the view that Govt should come to the sector’s rescue and suspend the repayment of the loans for at least one year till June 30 next year. Moreover, they also demanded the clearance of the stuck-up machinery for the textile factories at the Karachi and other ports so that the factories start work at the earliest.

Published in The Daily National Courier, December, 27 2022

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