KARACHI: All Pakistan Textile Mills Association (APTMA) Chairman Yasin Siddik has said that the approval of the Generalised System of Preferences Plus (GSP-plus) status from the European Union (EU) next year and rupee depreciation against dollar will help increase Pakistan’s textile exports to $15 billion in fiscal year 2013-14.
Yasin Siddik said that the sliding of rupee is a positive sign for exports of Pakistan as the rupee has fallen 8% since the beginning of 2013. He said that the GSP-plus status from EU would have a positive impact on both unfinished and value-added textile exports of Pakistan.
Last year, Pakistan exported around $13 billion worth of textile products. With a share of over 50% in the country’s total exports, the textile industry is expected to emerge stronger in fiscal 2013-14.
Experts believe that Pakistan’s textile exports are going to benefit from two more reasons. Firstly, China is focusing more on the technology sector instead of textile, but yarn demand from China is growing.
Secondly, Bangladesh – the second biggest textile exporter in the world after China – is not getting the same number of export orders as it was getting a year ago. The country is facing major challenges in safety concerns of textile workers. Recent fire incidents in factories of Bangladesh, where hundreds of workers had died, attracted negative international media coverage.
Despite these two developments, Pakistan is in the middle of cut-throat competition from India – the country’s regional competitor in textile exports. India – the third biggest exporter of textile goods in the world – is looking forward to make the most of these changing trends in the regional market and is targeting $17 billion textile exports this year.
Leading textile industrialists insist that the rise in gas tariff for captive power plants by 17.4% and electricity rates for industrial units by 57% in recent months are going to hit the profitability of the sector in the ongoing fiscal 2014.
However, despite these expected increases in the cost of production, analysts are upbeat on the profits of the textile industry in the fiscal year.
Pakistan is trying to get duty-free access to the United States – one of the world’s biggest markets for textile products – where Bangladesh exports its textile products in huge quantity and has managed to become a dominant player. On rising concerns of international labour rights associations, the US is in the process of suspending the GSP-plus status to Bangladesh. If this happens, it will give another boost to Pakistani textiles exports to the US in the coming years.