Budgetary funds allocated for textile industry expires
Industry experts revealed last week, that a huge amount of Rs 17.5 billion, which was sanctioned for the textile industry, during the 2009-10 fiscal, expired owing to delay in its release by the Finance Ministry.
However, the total allocated amount for the textile industry was Rs 27 billion. Of this only Rs 9.5 billion was released to the State Bank of Pakistan by the Finance Ministry during the financial year, under consideration, the balance amount expired by the end of the same year, inform industry experts.
Further more, experts aver that, no such budgetary allocations were made available in the budget 2010-11, and hence, the government cannot continue with the textile package, without any allocation. A five-year Textile Policy 2009-14 was declared on August 13, 2009, with targeted exports of $25 billion by 2014.
The Textile Ministry has declared various policies and incentives to achieve the aforesaid target. About Rs 42 billion was allocated in the budget 2009-10 to improve exports, of which Rs 27 billion alone, was sanctioned for exports of textile. If exports of textile rise by at least 25 percent in the coming four years, $25 billion worth of exports can be attained.
On the flip side, textile exports registered merely five percent increase in value during 2009-10, but the quantity slumped by over 10 percent.
Against their revised target of $18.8 billion, Pakistan witnessed net exports of $19.3 billion 2009-10. Of this, textile exports registered a value of $10 billion. Rise in the value of exports was merely due to rise in prices.
More over, experts informed that, in order to attain export growth of 25 percent per year, government will have to restrict raw cotton exports and also extend the 15 percent regulatory duty on yarn exports, less than $3.5 per kilogram for the coming two years.
In the world garment market of $375 billion per year, Pakistan shares only one percent, but occupies 30 percent of the global yarn exports. Experts believe that, Pakistan is turning in to a raw material supplier than a value-added supplier.
The country's exports of cotton have earned average rates of about $1.4 per kilogram, of fabric $4 per kilogram (wherein price varies from $1.5 – 6 per metre), of yarn $2.2 per kilogram, apparels including knitwear is $12 per kilogram and home textiles it is $6 per kilogram.
The key buyer of denim from Pakistan is Turkey, which is one of the leading nations in fashion designing. Turkey exports jeans for $13 a piece, crafted from Pakistani denim; on the contrary, Pakistan exports jeans for only $9 a piece made from the same denim.
Explaining the price disparity, experts said that, the primary reason is Turkey's proximity to European markets. More so, the country is aware about Europe's fashion, and their delivery take no more than six days to any European port. Pakistan on the other hand is located at a distance of 30 days.
Fibre2Fashion News Desk - India