ISLAMABAD/lahore -  The federal government on Saturday said that it would announce an incentives package for the textile sector to boost tumbling exports.

“A new package will soon be announced to enhance the country's exports,” said Minister for Commerce and Textile Pervaiz Malik while talking to media after inaugurating an office of All Pakistan Textile Mills Association (APTMA) in Islamabad. He further said that was an important sector and it will be fully supported. “The government is reviewing the Prime Minister’s incentives package, which had not yielded positive results for enhancing exports of the country,” the minister said. The government would give incentives and reduce the cost of production to boost the tumbling exports of the country. The minister said efforts are also afoot to enhance the cotton production by focusing on cotton research in collaboration with All Pakistan Textile Mills Association.

Meanwhile, as per the latest data released by Pakistan Bureau of Statistics, textile exports for the month of August 2017 recorded a growth of 9 percent to $1.17b. On a cumulative basis, textile exports expanded 6 percent to reach $2.18b in two months of ongoing financial year (2MFY18).

During Aug, growth in exports was primarily led by the value-added segment, which grew by 16 percent to $870m. On the other hand, basic textiles exports registered a drop of 9 percent YoY to $302m.

Improved performance of the value added segment is attributable to strength of Euro currency (up 7 percent since July).

During the month of Aug, textile exports were recorded at $1.17b as compared to $1.08b in same period of last year, reflecting a decent increase of 9 percent YoY. This expansion was primarily led by the value-added segment, exports of which were recorded at $870m as compared to $748m in Aug’16 (+16 percent YoY). On the other hand, basic textiles exports registered a drop of 9 percent YoY to $302m from $332m in Aug’16. In volumetric terms, knitwear, bedwear, towels and readymade garments exports registered an increase of 29 percent/7 percent/10 percent/11 percent YoY, respectively. Whereas, volumetric exports of cotton yarn and cotton cloth contracted by 6 percent and 18 percent YoY, respectively.

Experts attribute improved performance of the value-added segment to the strength of Euro currency, which has strengthened 7 percent since the beginning of FY18. On the flip side, the poor performance of basic textiles exports can be explained by stiff competition from regional competitors such as India and low demand from key market of China.