LAHORE - The Pakistan Readymade Garments Manufacturers Association has observed that country needs to offer more diversified products to benefit from the GSP plus and hence the import of raw material specially fabric for re-export must be made easy and bundled with SRO 492 instead of DTRE.
PRGMEA central chairman Sajid Saleem Minhas said that small trims that carry no commercial value should also be made duty-free to avoid delays and problems with customs.
He expected that textile sector exports growth will continue in FY14 on the back of continued textile demand from China and estimated 7% local currency depreciation. He said that Cotton Crop Assessment Committee has estimated that Pakistan’s cotton production stand at 13.25 million bales in FY14, slightly better than 13.0m bales in FY13.
Exports and profits of the sector could also improve due to expected GSP Plus (Generalized System of Preferences) status from EU (European Union) as lower import duties will make our products more competitive. Further operating environment of the sector may get better in low interest rate scenario and if energy situation improves.
Industry experts said that last fiscal year, FY13, was one of the better years for Pakistan Textile Sector in terms of sales and profits though energy crisis kept on negatively affecting the industry (especially in winter). For FY14, they expect similar favorable operating conditions for the sector as witnessed in FY13. Moreover, GSP Plus status from EU and expected improvement in energy situation is also likely to support earnings in FY14.
FY13 remained quite favorable for the textile sector as prices remained stable and floated around US$80/lb. Further, strong yarn and grey cloth demand from China region coupled with 7% Pak rupee depreciation also provided added impetus to profits.
In FY13, Pakistan exported US$13bn (Rs1.2tn) worth of textile products which is up 5.9% in US$ terms while 14.7% in local currency. Considerable growth in exports is mainly attributed to imposition of cotton floor price in China that encouraged Chinese textile manufacturers to import more yarn and grey cloth instead of making them from costly local cotton. Resultantly, Pakistan’s Yarn and grey cloth exports increased by 24% and 10% to US$2.2bn and US$2.7bn, respectively, in FY13.