KARACHI: The country’s exports rose 16.16 percent year-on-year and surged 17.52 percent month-on-month to $1.912 billion in June as exporters appeared to have made a last-ditch effort to arrest the export decline in the end of fiscal year of 2016/17, official data showed on Tuesday.
Pakistan Bureau of Statistics (PBS) data showed that imports decreased 10.96 percent to $4.534 billion in June over May, while imports increased 2.16 percent in June as compared to the same month a year earlier.
Exporters attributed the increase in June exports to the rush of exporters to benefit from condition-free rebate scheme which ended on June 30. In January, the government announced Rs180 billion incentive package to rejuvenate sagging exports. The one and half year package will end on June 30, 2018 and it includes duty drawback rate of seven percent for textile garments, six percent for textile made-ups, five percent for processed fabric and four percent for grey fabric.
The package has, however, stipulated rebate claims to at least 10 percent increase in textile exports by the end of the current fiscal year. The government believed that the condition would add $2.5 to 3 billion in the country’s exports by June-end 2018.
A leading textile Jawed Bilwani said the increase might stem from exporters’ alacrity to benefit from the ending scheme. Research analyst Adnan Sami Sheikh at Topline Securities Limited weighed in. “To take advantage of condition-free rebates, exporters likely to boosted exports,” Sheikh said.
Leather exporter Fawad Ijaz Khan advocated that the condition should be waived to improve share of non-textile sector in the export basket, dominated by textiles accounting for more than 60 percent of total exports. The package also comprises of incentives for sports goods, leather and footwear.
Bilwani said value-added exporters have already filed Rs9.5 billion of claims under duty drawback and out of that the central bank disbursed only three billion rupees. He estimated that the total quantum of export claims must be around Rs28 billion.
In June, gap between exports and imports sharply widened 24.33 percent month-on-month and increased 6.09 percent year-on-year to $2.622 billion, according to PBS. Trade deficit, however, swelled 36.32 percent to $32.578 billion in July-June as imports rose 18.67 percent to $53.026 billion, while exports fell 1.63 percent to $20.448 billion.
Trade data showed that imports usually are getting a shot from growing demand of machinery for infrastructure developments, while increasing consumer appetite also results in rise in food and electronics import bill.
Yet, consistent decline in exports is cause of concern for the textile industry. Bilwani, who also heads Apparel Forum representing textile value-added sector, said exporters are unable to properly capitalise on government incentives due to high cost of production.
“Our input rates are high when compared with those of India or Bangladesh,” he said. The government, he added, should separately treat textile industry when it comes to electricity and gas tariffs. “So, we can compete with others.”
Source: Thenews.com.pk
