The Pakistani textile sector is heading into a winter of discontent. All Pakistan Textile Mills Association (APTMA) has said utilisation of cotton is likely to reduce to 8.5 million bales this year from 14 million bales, as the export-dependent working capacities of spindles and looms have either been restricted to one-shift operations or closed down because of the high cost of doing business, Pakistani newspapers have reported.
“The production of only 25 per cent spindles, converted to garments and made-ups, could survive in case the high cost of doing business keeps hurting the sector constantly,” APTMA spokesman said. Furthermore, six to eight million textile workers would be jobless with permanent closure of the export-dependent spindles and looms, he said, adding that 400,000 bales per month were being consumed by the textile industry, but recently there has been a substantial drop in the consumption of cotton bales.
“The utilisation of cotton bales is likely to reduce to 8.5 million bales this year in case the government delayed the decision of reducing cost of doing business,” he pointed out. The APTMA spokesman said the exports of both yarn and greige fabric worth $ 3 billion are under threat due to the non-viability of textile industry owing to increase in power tariff to Rs 15 per unit from Rs 9 per unit that has virtually turned the textile industry upside down.
Since the textile industry in Pakistan is no more cost effective, the international market is not responding to its exportable production, he said. “The textile industry has been designed to consume 14 million bales and produce exportable surplus for the country but the export-dependent spindles and looms are falling down one after another and Pakistan was losing the international export market of both yarn and fabric,” he said.
“The structural imbalances are resulting into closing down of mills across the board,” he added. He said a crisis in the textile industry could be judged from the fact that the Federal Bureau of Statistics has reported 30 per cent decline in exports of fabric in September 2015.
The APTMA spokesman also said that the cascading effect of closing down textile mills would hit cotton farmers, textile workers and foreign exchange through merchandise exports. (SH)