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Research and Markets: The Textile Industry in Pakistan Invested US$6.4 Billion During the Period 1999-2007. See the Outlook for Its Textile and Cl
Monday April 27, 10:41 PM
Research and Markets(http://www.researchandmarkets.com/research/45dd44/pakistan_textile)
has announced the addition of the "Pakistan:
Textile and Clothing Exports" report to their offering.
Pakistan's textile and clothing exports fell in the first eight months
of the current fiscal year, due to surging raw material prices, energy
crisis, financial costs and global recession.
Shipments to foreign countries were down 6 percent in value terms during
the first eight months of the current fiscal year compared with the same
period last year.
Pakistan's textile and clothing exports fell in the first eight months
of the current fiscal year, due to surging raw material prices, energy
crisis, financial costs and global recession.
Cotton yarn, the primary export earning category went down by 15%, woven
readymade garments by 12%, bed wear by 10%, knit wear garments by 3%
during the period.
However, exports of cotton cloth and Towels went up by 6% and 10%
respectively.
2006-07 (July-June) was the best year for Pakistan's textile and
clothing industry when the industry managed to export US$ 10.8 billion
with the support of friendly government policies, international
propitious environment, and lower cotton prices.
The shift in government policies, increases in input costs, and the
global recession have changed the scenario for textile exports from
Pakistan. Now the textile industry in the country is passing through a
very critical period with number of closures and shutdowns.
Since 2004, diesel prices in Pakistan has gone up by 150 percent, petrol
prices by 71 percent, gas prices by 91 percent, electricity cost by 60
percent, minimum wage of unskilled workers by 140 percent.
The textile industry in Pakistan invested US$6.4 billion during the
period 1999-2007, when interest rates were extremely low. Textile
machinery imports, as a result reached the highest level of US$928
million during the fiscal year 2004-05. This was US$438 million in the
last fiscal year, reflecting the lack of modernization in the industry.
Cotton remains a primary raw material for the textile industry in
Pakistan, accounting for over 70 percent of the total production cost.
Consumer price index (CPI) in Pakistan reached the highest level 21.1
percent (YoY) in February 09
The increase mainly came from surging food prices which recorded at 22.9
percent during February 09, mainly due to an increase in the prices of
essential food items. In addition energy prices also contributed a lot
to the inflation.
To counter the rising inflation in the country, the government of
Pakistan has announced an increase in minimum wages of unskilled workers
to PKR6000/month (US$75/month), but there is reported wide payment of
the older rate still, of PKR4000/month (US$50/month).
Government Supports and Subsidies
The government of Pakistani devalued the local currency by around 27%
against the US dollar in last one year.
The government of Pakistan had been paying a 6% Research and Development
(R&D) subsidy on exports of woven and knitted garments, 5% on dyed and
printed home textiles, and 3% on dyed and printed fabrics. These
payments are now suspended since July 2008.
The government has paid some PKR 31 billion to the textile exporters
against the scheme, including PKR 6.975 billion to fabrics, PKR 0.997
billion to bed wear and knitwear and PKR 21.175 billion to garments
sector.
The subsidy was first announced in June 2005, but only for knitted and
woven garments.
In mid-2006, home textiles and finished fabrics were included in the
scheme.
State Bank of Pakistan (SBP) has also paid more than US$ 800 million to
the textile sector under the Long Term Financing of Export Oriented
Projects (LTF-EOP) scheme since May 2004.
The interest rate is charged at around 7.5 percent -repayable in 7
years- against normal rates of 12 to 13 percent.
Initially only value added sectors of textile chain (weaving onward)
were eligible under the scheme.
In the trade policy announced on 18th July 2007, scope of the scheme was
further enlarged to cover export oriented, core and developmental
sectors, purchase of locally manufactured machinery and compact spinning.
For more information visit http://www.researchandmarkets.com/research/45dd44/pakistan_textile
Contact:Laura WoodSenior Managerpress@researchandmarkets.comFax
from USA: 646-607-1907Fax from rest of the world: +353-1-481-1716
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