50 Star US Inc.
The textile industry in Pakistan has seen a major decline in the output of cotton yarn and cotton fabric, with a 26% overall decline from the previous year.
Although the output of clothes increased by 13% yearly in April 2023 and an astounding 26% annually in the first 11 months of FY2023, the garment industry has experienced extraordinary growth.
According to Nasheed Malik, an analyst for the textile industry at Topline Securities, there are a variety of explanations for the decline in production of cotton yarn and cotton cloth, two capital-intensive segments of the textile industry.
These elements mainly rely on machinery and power, which includes automated processes like spinning and weaving. This decrease is the result of a confluence of technological constraints, financial challenges, and changes in raw material prices.
Malik emphasized that two cycles of rupee devaluation against the US dollar occurred in Pakistan's currency in 2018–19 and 2022–23. Again, there are two main reasons for the success of the garment sector.
"These devaluations have made Pakistani labor comparatively cheaper, providing a competitive advantage similar to that of Bangladesh," he continued.
As a result, Pakistani clothing and garment production has grown more affordable, drawing more orders from global consumers.
The All-Pakistan Textile Mills Association (APTMA) is concerned about the high energy costs in the sector, which account for between 30 and 40 percent of manufacturing expenses. Losses and cross-subsidies should not be included in a separate category of power pricing, according to the APTMA. The industry's ability to compete would increase and its cost structure would be significantly affected by lower electricity prices.
In contrast to the current value of $16.5 billion during FY2023, which represents a 15% year-over-year reduction in the 11-month period, textile exports might potentially reach $50 billion by FY2027 if this demand is realized.
A worrying 14.37% year-over-year decline is seen in the Large-Scale Manufacturing Index (LSMI) for May 2023, according to recent statistics. Additionally, a reduction of 9.87% year over year is shown overall for the first 11 months of FY2023. Several industries, including those in the textile, automotive, food, pharmaceutical, petroleum, cement, and tobacco sectors, are to blame for this loss.
The 2.6% and 0.5% growth rates in the clothes and furniture sectors, respectively, have made some positive contributions. The LSMI has shown a promising month-over-month rise of 5.9%.
Pakistan's declining textile industry and expanding apparel industry serve as a reminder of the necessity for all-encompassing measures to address the sector's problems. Government officials, business leaders, and politicians must work together to develop creative solutions that boost productivity, cut costs, and boost competitiveness. Pakistan may work to develop a more robust and prosperous manufacturing sector by utilizing the garment industry's advantages and tackling the challenges it faces.
Comentarios