South Asian Business news and information

Business Recorder reports:

The textile industry is already finding it difficult to cope with power interruption, and 5.56 percent increase in gas tariff increases its problems. Things are not moving in the right direction as the industry will have to face 700 MW power shortage till March, 2008, they said.

Sources said that according to estimates these problems would curtail the export target for 2007-08 by 13.65 percent. The contribution of Pakistan to USA import is just 4 percent of the total. "Total imports of the United States are around $100 billion whereas our share is just $4 billion. Our increasing cost of production and the poor quality have raised our prices by 12 percent as compared to the regional competitors. That is why the country is losing its share in the international textile market", sources added.

Bangladesh, whose textile exports target for the current fiscal year is $9 billion, is earning more in international market than Pakistan. It enjoys 'zero' percent rate of duty on its imports in EU market, being least developed country.

Compared to Bangladesh, production cost in Pakistan is 30% more and the higher gas price will also add to it. At this situation, the industry owners think that it would be better for the textile industry if Pakistan government decides to subsidize the gas tariff.

Pakistan is now going through a tough time. The political instability is already affecting the business. At such a moment, the government should not take irrational decisions. On the other hand, the textile industry owners who would hurt by this new gas tariff should meet with government officials and discuss the issues to find out suitable alternatives.

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