Connect with us


More industries to halt operations, warns value-added textile sector



  • Value-added textile sector warns of job losses. 
  • Says exports have declined sharply. 
  • Around 7 million workers likely to lose jobs. 

KARACHI: Lamenting the current economic crisis, Pakistan’s value-added textile sector feared that more industries would halt their operations, which would increase the number of layoffs, The News reported Tuesday.

Associations representing the value-added textile sector, while speaking during a joint presser, said that other exports have declined sharply along with textiles. They said that it is likely to further decline to the lowest ebb amid dangerously low foreign exchange reserves.

Participants included Value-Added Textile Forum Coordinator and Pakistan Apparel Forum Chairman Muhammad Jawed Bilwani, Pakistan Hosiery Manufacturers and Exporters Association Chairman Muhammad Babar Khan, PHMA Zonal Chairman Khizer Mehboob, Pakistan Knitwear and Sweater Exporters Association Chairman Rafiq Godil, Pakistan Cloth Merchants Association former chairman Abdul Samad, and chairman of the Towel Manufacturers Association of Pakistan.

They pointed out that industries were compelled to shut down and lay off around 7 million workers, of which 4 million were the textile sector’s workforce.

Raising the matter of letters of credit, the industry representatives said that import of necessary raw materials and accessories with even nominal values such as $5,000 were denied, which dented export orders. This caused severe disruption and delays in completion and even cancellation of export orders.

This situation also led to port demurrage of various consignments, which exceeded the cost of those materials that were damaged and would now be auctioned as they were of no use to export industries.

Recently, textile exporters were also deprived of their remittances to participate in a global textile exhibition scheduled in Germany and barred from sending exhibition materials via an international courier. Participation only became possible after the intervention of the Trade Development Authority of Pakistan, which sought special permission from the State Bank of Pakistan for the purpose.

The value-added sector demanded the government to give it first priority instead of third in imports of raw materials compared to the imports of even essentials like wheat and edible oil and energy.

Decrying the delay in the release of sales tax refunds, they asked the government to disburse the amount in 72 hours after approval of eRPOs instead of delaying it for two months.

Industrialists have lost faith in the government because of its failure to strengthen the economy. It was impossible to operate under extreme financial stress and an economic crisis. All priority should be given to the value-added textile exporters, the presser participants demanded. The government should allow exporters to spend 20% of their foreign remittances on the import of raw material and accessories.

SBP has already allowed exporters to retain 10% of their export proceeds in Exporters Special Foreign Currency Account to spend these US dollars on various purpose e.g. foreign consultant payment, hotel booking and travelling, payment for IT equipment and software, lab testing charges, audit/ inspection/ certification charges etc.

Talking about the gas crisis, the industrialists said that amid the gas crisis in the country, particularly in Karachi, they felt deprived of a level playing field and a viable business environment.


November inflation to spike on gas price adjustment, dashing slowdown hopes




  • CPI likely to rise to 28.6-29.6% year-on-year in Nov.
  • Inflation rate could register 2.1% month-on-month jump.
  • Weekly SPI on Nov 16 showed 480% surge in gas prices.

KARACHI: Inflation is expected to surge in November, primarily due to a massive hike in gas prices, according to brokerage reports released on Wednesday.

The consumer price index (CPI), which measures changes in the prices of goods and services, is likely to rise to 28.6-29.6% year-on-year in November, up from 26.9% in October.

A report by brokerage firm Insight Securities predicts that the inflation rate will register a 2.1% month-on-month jump, defying earlier expectations of a gradual slowdown from September onwards. Optimus Capital Management estimates that the CPI will increase by 2.9% month-on-month, primarily driven by an 11.6% jump in the housing index due to gas price revision and a 1.6% increase in the food index.

The primary cause behind the expected spike in November inflation is the adjustment of recently imposed fixed charges within the gas tariff structure. The weekly sensitive price index (SPI) inflation released on November 16 showed an astonishing 480% surge in gas prices.

However, a slight respite is expected from a 4.0% decrease in the transport index due to lower average fuel prices in November. The impact of the gas price hike was partially mitigated by the decline in fuel prices and the month-on-month fall in the food commodity adjustment (FCA).

Food inflation is attributed to a sharp increase in the prices of perishable items such as onions, tomatoes, potatoes, and eggs, as well as tea. Despite an increase in supply from imports, wheat prices still rose month-on-month, while sugar and cooking oil showed a significant decline during this period, based on weekly SPI data from the Pakistan Bureau of Statistics.

The recently implemented axle load regime, which limits the weight of goods transported by trucks, could put some pressure on the price levels of goods.

The higher October fuel cost adjustment (FCA) demanded at Rs3.5 per kilowatt hour (to be applicable in December) on electricity charges and a second-round impact of gas price increase could keep inflation under pressure. However, the base effect during the second half of the fiscal year is likely to help absorb the impact.

Commodity and energy prices, along with the exchange rate of the rupee against the US dollar, will remain important factors in keeping the CPI under control.

The reports projected the average inflation for the first five months of the fiscal year 2023/24 (July-June) to be 28.5%, compared with 25.2% in the same period last year and with an estimated ending at 19.4% year-on-year in June 2024.

They predicted that the State Bank of Pakistan (SBP) is likely to maintain the interest rate in its upcoming monetary policy committee (MPC) meeting due to the higher-than-estimated inflation in November. However, the SBP could opt to initiate an easing cycle in the first quarter of 2024, given the high base effect in the second half of the fiscal year.

Continue Reading


Petrol price likely to remain unchanged in next fortnightly review




  • Petrol prices to hold steady in next review.
  • Diesel and kerosene prices to decline from Dec 1.
  • Next fortnightly review due tomorrow (Nov 31).

KARACHI: The prices of petroleum products will not see any major change in the upcoming fortnightly review with diesel and kerosene rates expected to go down slightly, according to the industry calculations.

According to a The News report published Thursday, the ex-refinery and ex-depot prices of petroleum products did not register any major fluctuation as global crude prices eased in recent days.

The ex-depot price of petrol, the most widely used fuel in the country, is slightly higher by Rs0.19 per litre to Rs281.53 per litre compared to the current price of Rs281.34, industry officials said.

The ex-depot price of high speed diesel (HSD), used mainly for transport, has been worked out at Rs290.47 per litre for the next fortnight compared to the existing price of Rs296.71 , showing a decline of Rs6.24 rupees per litre.

The ex-depot price of kerosene, used for cooking and lighting in rural areas, has been worked out at Rs202.16 per litre compared to the current price of Rs204.98, indicating a decrease of Rs2.82 per litre.

The ex-depot price of light speed diesel, another variant of diesel, has been worked out at Rs176.18 per litre for the next review against the present price of Rs180.45, registering a decline of Rs4.27 per litre, the report stated.

According to the industry’s working, the estimated exchange adjustment of petrol is zero whereas it is Rs1.80 per litre for HSD.

However, the industry officials said that the prices of petroleum products can change with the exchange loss as the industry did not put the exchange loss figure in its working for the next review.

The country fixes fuel prices on a fortnightly basis after evaluating fluctuating international energy market costs and the rupee-dollar parity to transfer the impact on domestic consumers.

They said global oil prices remained under pressure during November, falling below $75 a barrel in mid-November.

WTI was trading at $76.5 a barrel on November 29, down by nearly 7% as compared to October 29. Brent was down by 5.4% in the past month, trading at $86.35 a barrel, they added.

Continue Reading


Another day, another high: PSX continues bull run as KSE-100 goes past 61,000 points




KARACHI: The Pakistan Stock Exchange (PSX) on Wednesday reached another historic high as the bulls continue to dominate the benchmark KSE 100 index with hopes of the State Bank of Pakistan lowering the policy rate in the coming days. 

Benchmark KSE-100 index at 10:09am. — Screengrab/PSX website
Benchmark KSE-100 index at 10:09am. — Screengrab/PSX website

The benchmark index gained 702, or 1.16%, during the intraday trade and stood at 61,433 points at 10:09am. 

Commenting on the bull run, Head of Research at Pakistan-Kuwait Investment, Samiullah Tariq said that the market was reacting positively because it expects an interest rate cut, a quick International Monetary Fund review and strong profitability of companies. 

Continue Reading