Pakistan’s exports are coming under increasing impact of a double-edged sword. One is the growing perception among foreign buyers of domestic uncertainty and the second is local exporters’ fear of recession in the US market which absorbs almost 25% of total outflow of Pakistan’s goods.

Exporters of textile and clothing have been advised to be cautious while dealing with US importers, who are presently defaulting owing to all-round recession, particularly in textile apparel sectors.

The advice has been issued by trade bodies after many exporters to US market have lodged complaints with them that the US importers have failed to make huge payments towards export proceeds and this was causing severe liquidity crunch for their operations and export commitments.

As a result the trade bodies have warned their members to desist from entering into any export contract with buyers in cases where payments have been deferred or were made on acceptance of documents.

Iqbal Ibrahim, Chairman, All-Pakistan Textile Mills Association (APTMA), said that events after assassination of Benazir Bhutto have shaken confidence of foreign buyers who fear that their orders may not be serviced according to the schedule.

Equally worrisome are reports on recession that is setting in US markets where Christmas and New Year sales did not match last year’s turnover. Markets are reporting lesser turnout of buyers as rising oil prices and impact on economy are gradually eroding purchasing capacity of US consumers.

During the first six months (July-December) of 2007-08, textile exports stood at $5.228 billion as compared to the corresponding period of 2006-07 that accounted for the total textile exports of $5.489 billion, showing a dip of about 5%.