Traders have voiced fear that Pakistan’s export revenues will decline further in the coming months and have called on the government to make serious efforts in order to place monthly exports on a growth trajectory.
They added that the growth in July 2020 export figures was a temporary phenomenon and the dip in August 2020 export revenues was predicted beforehand by the exporters.
“Next three months are highly crucial for Pakistan’s export sector, primarily textile, as we are anticipating a dip of over 10% in export revenues for September,” said Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Patron-in-Chief Ijaz Khokhar.
Talking to The Express Tribune, Khokhar said export orders dropped to nearly zero during the months when the Covid-19 pandemic had been at its peak ie April-June 2020 - and all shipments were put on hold.
“The dispatch of piled-up orders was the main reason behind the growth in exports in July,” Khokhar said.
According to the Pakistan Bureau of Statistics, the country earned around $2 billion in exports during July 2020, however, the receipts fell 20% to $1.6 billion in August.
Financial managers have targeted export revenue of $27.7 billion for the current fiscal year but exporters are uncertain about achievement of the target.
“Achieving the yearly export target is now out of the question since there is a looming fear of the second wave of Covid-19 in European markets,” Khokhar added. “On the other hand, textile exporters are currently working on 50% capacity due to low demand from international buyers.”
Renowned economist Dr Qais Aslam was of the view that any increase in exports was not sustainable for Pakistan at this point in time, highlighting that exporters and government officials had to make additional efforts to diversify the product lines.
“There is a reason why exports increased in July,” he told The Express Tribune. “During that month, international trade and global transportation resumed after lockdown and piled-up orders were dispatched, which translated into higher exports.”
He added that the surge in July exports came due to low interest rates and rupee depreciation against the US dollar.
“We have a huge opportunity at hand from China, which is keen to import value-added agricultural and livestock products as well as fruits from Pakistan,” he said. “However, the issues pertaining to quality still remain.”
The economist called on the government to support these industries, citing that international trade was growing steadily and Pakistan needed to add avenues, other than textile, to its export basket in future.
Capital market expert Aftab Ahmad pointed out that the country’s exports dropped in August because economies of all the major export destinations for Pakistan faced an unprecedented decline in the second quarter of 2020.
“Although this trend seems to have reversed somewhat in the third quarter, export markets are not yet out of the woods,” he said.
Published in The Express Tribune, September 11th, 2020.
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