TC September-October 2021 Issue

TRADE CHRONICLE
The exports target for textile
set at $25 billion by FY2023
Pakistan total textile exports
reported mixed trend in last three
years. It earned export revenue of
$13.32 billion in Financial Year 2019
(July – June) but rose to $12.53
billion in FY20 and reached $15.40
billion in FY21. The All Pakistan
Textile Mills Association (APTMA)
is now anticipating textile export
to surge at $21 billion in FY22 and
hopefully $25 billion in FY23. But
subject to continued support in a
new incentivised textile policy and
subsidy on energy supply. Some
business leaders differ, saying it’s
improbable, overoptimistic.
Likewise, the growing export trend
was continued in September 2021
and textile exports increased by 25%
Year on Year to $1.5bn compared to
$1.2bn in Sep’20. This was possible
despite logistics and supply chain
issues such as congestion on
ports and higher freight costs, and
the growth pattern was also 2%
Month on Month. Experts credit
the opportunity created due to
higher export orders from the US,
Europe, and Asian regions after
Karachiites suffering drags
PTI attention!
Without KCR / Metro system,
Karachi’s over 20 million population
looked for some solution to their
transport woes for a long time, but
to no avail. But luckily, Karachi
Circular Railway and GreenLine
Buses Project finally resulted in
Sindh-Islamabad “agreement” only
for joint working.
Resultantly, Prime Minister Imran
Khan graciously blessed the
“Metropolitan city without a Metro”
to again “formally inaugurate” a
wickedly neglected and forgotten
KCR project.
Likewise, the GreenLine buses
project ran in October, with 80 buses
reportedly “being brought”.
Karachiites already saw the ill fate
of previous projects and many bus
lines were hit in “accidents” by
the transport mafia and sent rest
in garages, with KCR blockade.
Ascertaining that must not happen
reopening global economies
and easing Covid-19 lockdowns.
That increased demand for textile
products and increased new
customer base and value addition,
which mainly led to the increase
in textile exports during the said
period.
Because of these envisaged growth
targets, APTMA has informed the
government that more than 100 new
textile units are being set up across
Pakistan and the investment of $ 5
billion in the textile industry after 13
years due to regional energy price
for the entire value chain. However,
it requested the government
ensure the uninterrupted supply
of RLNG for power stations so that
intermittent flow in the pipeline
remains regular. As a result, 500,000
fresh employment opportunities are
to be created.
APTMA advocates that regional
competitive energy Tariffs of 9 cents/
KwH for electricity and $ 6.5/MMBtu
for gas/RLNG across the entire
textile value chains are critical to
achieving $21 billion exports in FY22
as 85% of production is exported.
In contrast, only 10% of units are
vertically integrated, completing a
ever again is binding on all and
sundry. On the one hand, the federal
government appears intent on
bringing the KCR dormant project
to life by mid-2023, as indicated
by reports of the meetings chaired
by Federal Planning Minister Asad
Umar. Still, the Sindh government
appears to be allegedly delaying
matters on account of bureaucratic
hurdles.
The Frontier Works Organisation
(FWO) has to begin construction
on the KCR route in two phases, for
which the Sindh government must
pay the agency Rs6bn as its share.
Regrettably, no contract or work
order seems to have materialised
so far in this regard, local media
remarked.
Health, education, housing and
transport are among citizens’
fundamental rights that most
governments in the world provide,
but not our governments, as we
still lack them, and must ascertain
people’s welfare. Right away,
governments should present their
set target of $ 25 billion in FY23.
The government’s incentives to the
textile sector, including a reduction
in gas prices for export-oriented
sectors, rebates for exporters,
lower financing rate on LTFF (Long
term financing facility), and export
refinance scheme, provided support
in these crucial times. Both nonvalue
added and value-added
segments showed double-digit
growth on a YoY basis (1QFY22).
Cotton Yarn remained in demand as
sales increased by 69% YoY to $289
million compared to $170 million
earlier.
We hope the government will
continue rationalising imports
tariffs on raw materials and power
subsidies. Experts believe that the
demand for Pakistan’s textile exports
will likely remain strong due to the
continued rerouting of orders out
of China and other regional Asian
countries. The capital investments
by various textile exporters is an
indication of solid order flows, while
the recent PKR depreciation also
enhances exports’ competitiveness.
We firmly believe that all these
factors will increase our exports and
ease pressure on the trade deficit.
viable design and upgrading of an
active national transport policy
actively and ensure its proper
implementation.
If governments cannot do it, they
should partner with the private
sector and strictly monitor it,
with fines against violations, or
ensure the private sector provides
safe, economical and respectable
transport services.
The KMC – deprived of many of its
rightful powers – seems to loiter in
everlasting slumber without funds or
authority – even for simple garbage
disposable - and was therefore
paralysed without doing much to
provide civic amenities to people.
We urge both the centre and the
Sindh government should do their
utmost to make the KCR dream a
reality. Only then will we see a visible
improvement in the lives of those
millions of commuters who reside in
this sprawling city.
TRADE CHRONICLE - Sep - Oct - 2021 - Page # 5