Pakistan exports of readymade garments in 2022 Pakistan’s textile exports surged to an all-time high as they surged by 25 percent to US$11 billion during the first seven months of the current fiscal year compared to US$8.76 billion in the same period last year, according to the Pakistan Bureau of Statistics (PBS). The key export driver during the last seven months was value-added exports where the knitwear segment contributed the most, as it increased by 33 percent year-on-year (YoY) to US$2.9 billion followed by ready-made garments 22 percent to US$2.2 billion and bedwear by 19 percent to US$1.9 billion exports, the data shows. The data shows that on a month-onmonth (MoM) basis, Pakistan’s textile exports were down 4 percent to US$1.5 billion in January 2022, led by lower value-added exports segments mainly in knitwear down 12 percent MoM and ready-made garments down 4 percent MoM respectively. As compared to the last year, Pakistan’s textile exports remained up by 17 percent on yearly basis on January 22 led by significant recovery witnessed in value-added segments, largely in
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PAKISTAN TEXTILE JOURNAL - March 2022
knitwear up by 19 percent YoY, readymade up by 17 percent YoY, and bedwear 21 percent YoY. It is expected that Pakistani exporters will touch US$18 to US$19 billion at the end of the fiscal year. The federal cabinet on 15 February 2022 finally approved the Textile and Apparel Policy 2020-25 after the Ministry of Commerce submitted the revised draft of the textile policy to the Economic Coordination Committee (ECC) incorporating a few amendments. The key reason behind the late approval was the dispute between the Commerce Ministry and the Energy Ministry on the issue of Energy Tariffs (RLNG and Electricity).According to a report by Topline Securities, the updated draft stated that Energy Tariffs will be provided to the textiles and apparel industry at regionally competitive rates during the policy years. For this, the tariff will be reviewed and announced in the federal budget by Finance Division.As per the Pakistan Institute of Development Economics (PIDE), the average regional electricity tariff rate stood at 7.4 cents per kWh in March 2021 which, as believed, has increased since then. Pakistan’s current electricity tariff is around nine cents per kWh.
In the case of RLNG, the average regional RLNG rate stood at US$4 per MMBTU as per PIDE vs Pakistan’s tariff rate at US$6.5 per MMBTU. It is believed that the above-stated textile policy will have a neutral impact on the sector. Given, Pakistan is already offering subsidized energy and RLNG tariffs to textile players and Pakistan is part of an IMF [International Monetary Fund] program, a further reduction from the current levels is highly unlikely. The RLNG tariff is expected to remain intact at US$6.5 per MMBTU level although the regional average is comparatively low. It is to note that RLNG is currently being provided at US$9 per MMBTU to the textile sector till March 2022 due to supply issues.
Millers incur heavy demurrages as cotton deliveries get stuck at port Textile mills have to pay millions of rupees in demurrages due to the delay in clearance and offloading of cotton consignments at the Karachi Port by the Plant Protection Department, a letter written by All Pakistan Textile Mills Association (APTMA) revealed recently.
