Pakistan's textile exporters have warned of a sharp export decline in the second quarter of FY27. Weak demand from Western buyers and rising freight costs are the main reasons, industry leaders said.
Khurram Mukhtar, Patron-in-Chief of the Pakistan Textile Exporters Association (PTEA), raised the alarm on Sunday. He said exporters are under pressure from all sides.
Freight Costs Have Nearly Doubled
Sea freight charges have climbed 1.5 to 2.5 times in recent months, Mukhtar said. Higher shipping costs are squeezing already thin profit margins.
High inflation in Western countries has cut demand from buyers there, he said. At the same time, inflation inside Pakistan has lowered demand at home. Exporters are facing pressure from both sides.
"The decline in export trade volume is unprecedented," Mukhtar said.
Whole Textile Chain Under Pressure
The slowdown is hitting every stage of production, Mukhtar said. This includes ginning, spinning, weaving, processing, and knitting.
If the trend continues, Pakistan could permanently lose export markets, he warned.
What PTEA Wants From the Government
PTEA has asked the government for:
- Temporary relief through the Duty Drawback of Local Taxes and Levies (DLTL) scheme, at 6% to 8%
- Quick payment of pending tax refunds
- An end to cross-subsidies in industrial electricity rates
- The promised 4.5% financing rate under the FY27 Export Finance Scheme (EFS)
Banks are currently charging exporters 5.5% to 8.5%, not the promised 4.5% rate, Mukhtar said. The Finance Bill FY27 announced the lower rate, but it has not been applied yet.
