Mansoor Sadiq

The textile sector crisis has intensified following a substantial increase in the electricity and gas tariffs and withdrawal of subsidies resulting in the closure of almost 50 percent mills, reports WealthPK. As per the data of the Pakistan Bureau of Statistics, during the Fiscal Year 2022-23, the total exports declined by 14.63 percent to $16.501 billion as against $19.329 billion recorded during the Fiscal Year 2021-22. The total volume of exports for the FY2022-23 recorded at $27.735 billion as compared to $31.782 billion during the Fiscal Year 2021-22, witnessing a reduction of 12.73 percent. The SBP data also disclosed that the exports recorded a reduction of 13.73 percent in June 2023 on a year-on-year basis and recorded at $1.471 billion as compared to $1.706 billion during the same month of 2022.

Similarly, as per the statistics of the All Pakistan Textile Mills Association, 2023 provedthe worst year in view of declined exports during the last 10 years. Expressing concern over the closure of textile mills and subsequent loss of thousands of jobs, Hamid Zaman from the North Zone of AllPakistan Textile Mills Association (APTMA) said the government was taking the least interest in addressing the challenges of the textile industry. He said the government had turned a blind eye to the prevailing woes in the textile sector and enhanced the gas and electricity tariffs. On the other hand, the Pakistan Cotton Ginners Association (PCGA) has expressed concern over the enhanced price of cotton (Phutti)and demanded that the government devise a clear strategy for the purchase of cotton and oil for their mills.

There are also reports that ginners have decided to suspend buying raw cotton from the farmers across the country after the district commissioners in the cotton belt, both in Sindh and Punjab, directed them to pay the growers not less than Rs8,500 for 40kg. Talking to WealthPK, Zahid Islam, Member Executive Committee of Pakistan Cotton Ginners Association, said the millers were paying Rs50 per unit of electricity, while the markup rates on their loans had become unbearable. The farmers are in a dilemma, as they are being offered Rs7200 for 40kg of Phutti, which does not even cover the production cost due to the rising prices of diesel, fertilizer, seeds, and pesticides. The farmers cannot even wait to prolong the sale of their produce as with the onset of rains, the prices of Phutti will decrease further owing to the storage issues. The cotton growers from South Punjab and Sindh are of the view that the government should protect their rights; otherwise,Pakistan might become a cotton-importing country.

Credit: INP-WealthPk