Devaluation to hit value-added textile
Value-added textile exporters said the rupee depreciation
will increase the cost of doing business and affect the sector
The rupee has devalued approximately 20.16% against the US
dollar from Rs123.6 to Rs149.07 in just 9 months of the current
government. Talking to media Central Chairman Pakistan Hosiery
Manufacturers & Exporters Association (PHMA), Jawed Bilwani said
the cotton yarn is available at the international price.
“Devaluation increases cotton and yarn price in rupees.
Following the US dollar appreciation, we have been facing
problems in importing machinery for which orders had been placed
earlier on,” he said. “If we are not in a position to import
machinery, how can we increase exports and GDP,” questioned the
PHMA chief. He added that foreign buyers are demanding discounts
due to the devaluation of the Pakistani currency.
Mr. Bilwani said the price of cotton yarn is cheaper in
Bangladesh as compared to Pakistan due to the lower cost of
utilities. “Most of the inputs – dyes, parts, chemicals,
petroleum products, accessories, packing materials – used by us
are also imported. As such, due to devaluation, their costs will
also increase, resultantly increasing the cost of exportable
goods,” he summed up.
An exporter Haji Salamat Ali said Pakistani exports need a
level playing field to compete with rival countries which are
rapidly increasing their market share. “Fluctuating rupee rates
have become a source of tension for the value-added sector as
the cotton yarn is the main raw product,” he noted. We were
already facing the issue of chemical rates and availability due
to an explosion at a Chinese chemical factory which was catering
to the needs of 70% of the world, he added.
Raza Hussain, a garments exporter, said spinning mills are
earning money by increasing the prices of yarn since the
government is not focused on speculative buying and prices of
Chairman Council of All Pakistan Textile Associations (CAPTA)
Zubair Motiwala said rupee devaluation would hit the
manufacturing sector hard. “Under the current situation, the
industry will have only two options – either close down or
increase price of manufactured goods further and become more
uncompetitive in the international market,” he said.
He said the profit margin of value-added textile exporters is
hardly 3% to 4%. Only exporters of raw materials – cotton and
cotton yarn – benefit from devaluation, he added.