Pakistan’s textile exports dropped 16.1 per cent in July 2018 compared to shipments recorded in June. On a year-on-year basis, textile exports in July fell half a per cent compared to July 2017. Textile exports roughly make up 60 per cent of Pakistan’s total exports.

One reason for the dip is the reduction in tax rebates that made things unviable for textile producers. Right now the industry is operating at five per cent profitability. It is also a fact, though, textile exports tend to fall in July as exporters try to increase exports in the closing month of the earlier fiscal year, which is June.

Pakistan recently adjusted its exchange rate by letting the currency weaken, but it won’t impact national exports. Pakistan’s textile production faces high input costs due to imports, which dilutes the impact of the depreciation on the textile industry. High quality raw material is imported by brands. Chemicals are imported while energy requirement is also generally met by diesel imports.

The textile sector hopes for better exports in winter when consumption increases in the west due to the cold weather and Christmas. Exports are also sought to be hiked by improving localisation and quality of raw material as better brands import better quality cotton to meet their requirement.