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Severe energy crisis: textile exporters unlikely to get benefit from EU deal

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Economic Updates - Pak Major Financial News

Pakistan is unlikely to fully utilise the European Union preferential trade deal due to severe energy crisis in the country, a senior official of the Textile Ministry revealed to Business Recorder.

The Ministry of Textile Industry has called a meeting of all stakeholders on Tuesday (today) to discuss the current situation of the industry.

According to the sources, decline in textile export, Most Favoured Nation (MFN) status to India and Technology Up-gradation Fund (TUF) will be discussed in the meeting.

The World Trade Organisation (WTO) finally gave approval to a package covering 75 items at a meeting of its Council for Trade in Goods (CTG) in Geneva last week.The deal was scheduled to come into effect in January last year, but was delayed after countries such as Argentina, Brazil, India, Bangladesh and Indonesia raised objections.

However, Pakistan's textile exporters will not be able to benefit from the concessions unless the government takes serious measures to resolve energy shortage that holds back the textile industry, officials added.About 30-35 percent reduction has been registered in the textile value added production due to energy shortage, they added.

According to sources, the authorities have suspended gas supply to textile industry of Faisalabad for the last 37 days with no production activity.Pakistan's value added textile export is likely to further decline because of serious continuing energy crisis, which has already marred the production activity in the major textile industrial city.

According to the estimated target the country will have 12.59 million bales cotton production this year.The local industry have the capacity to absorb 14-15 million bales but due to energy crisis, the industry would be unable to utilise around two million bales of cotton and it would be exported this year against 0.7 million bales of last year.

This will negatively affect the value added textile exports.

According to unofficial data, value added textile exports stood at $954 million in the month of January against $1176 million during the same period of last year following the ongoing energy crisis.

Courtesy: Business Recorder

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