After a disappointing trade policy, the textile sector is not pinning much hope on the textile policy as a best policy, using the resources allocated in the budget, could only support the operating units without reviving closed ones.
Global recession has sparked stiff competition in the international market and has increased the risk for suppliers. Bankruptcies in developed economies are rising and exporters are not even certain about payments for goods they ship. Orders for textile products have dropped sharply this calendar year which has put pressure on prices as too many suppliers are wooing a limited number of foreign buyers.
Pakistan Knitwear Manufacturers Association’s former chairman MI Khurram said he was disappointed to see the number of retailers going bankrupt during his visit to the US for a month. “Discounted sales there start from September but this year these were opened in June. There are a few buyers in the market.”
He said Bangladesh was the preferred country for the buyers of value added textile because of low prices, adding Pakistan got those orders that Bangladeshis could not meet and that too at very low prices.
He said government’s policies were further marginalising the textile sector. Any relief provided in the textile policy might only facilitate the surviving knitwear industry as 60 per cent units had closed down. He said reviving the closed units would require injection of capital which was unlikely to come in the current situation.
Pakistan Readymade Garments Manufacturers and Exporters Association’s former chairman Pervaiz Hanif said even the few surviving garment units were operating at a great risk. In recent months, he said, four consignments of garment exporters from Karachi and two from Lahore were returned by foreign buyers because they were short of finances. “Local manufacturers do not know how to dispose of these rejected orders.”
He said the trade policy was a great disappointment but even the best textile policy would not be able to address the problems faced by the garment exporters. “Stable power supply, reduction in interest rates and taming of inflation are of vital importance to ensure viability of surviving garment units.” He said the closed garment units would require much more such as a moratorium on loan repayment and injection of fresh capital.
All Pakistan Textile Mills Association (Punjab) Chairman Akber Sheikh said the spinning and weaving industry was on the verge of collapse and needed much more than small export facilitations. He said facilitation measures had been delayed for too long which had impacted the financial position of the basic textile industry, adding the global textile scenario had compounded the woes of the local industry as 85 per cent of its production went abroad.
He said Indian and Chinese textile industries could fall back on their domestic markets in case of pressure on exports as their share in the domestic markets was much higher than export markets. Even then, he added, the Chinese and Indian governments provided huge subsidies to their textiles to ensure that their exports did not suffer.
He said the government had delayed incentives. “Now normal facilitation that could have paid dividends 15 months ago will not work as besides closed units the surviving ones are facing financial constraints.”
