Textile Industry Of Pakistan Essay

2564 words - 11 pages

The aim of this report is to empirically analyze the relationship between interest rate, inflation, loan disbursed to textile sector, energy crises and yarn prices with textile sector growth in Pakistan during 2001 to 2011.Dependent variable is Textile sector growth Independent variables are Interest rate,, Inflation, Energy crisis, Price of cotton yarn and Loan disburses to textile sector.
The aim of this report is to empirically analyze the relationship between interest rate, inflation, loan disbursed to textile sector, energy crises and yarn prices with textile sector growth in Pakistan during 2001 to 2011.Dependent variable is Textile sector growth Independent variables are Interest ...view middle of the document...

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According to Pakistan Textile Journal, Pakistan is among top 10 textile exporters of the world with $11 billion however it is suffering in the worst period in decades. Textile sector is one of most significant part of Pakistan’s economy. Its contribution towards GDP, exports and Manufactured Value Added (MVA) is highest. It is the biggest employer of manufacturing labor force in Pakistan at 39% with third largest spinning capacity contributing 5% to the world spinning capacity despite this Pakistan has less than 1.0% of global market share on textiles, showing there is a great possibility for growth. (M. A. Ataullah, A. Sajid, M.R. Khan, 2014).
More than 60% of all exports from Pakistan come from textile related products and its contribution towards GDP is 9.5%. There has been a major decline in exports and production of textile goods of Pakistan however according to (Aliya Ahmed,2012) global recession which hit the textile industry all over the world was not the only cause our internal factors like rising energy costs and depreciation of Rupee effecting the cost of imported inputs also. Textile Industry is one of highest users of electricity in Pakistan. In the research by (Haider Ali and Muhammad Nawaz,2014) they found out that The highest electricity requirements go to spinning firms which have 18.69 thousand unit per-days, leading to textile, weaving & sizing, fabric and hosiery & readymade garments. While textile firms are requiring the 91.55 thousand unit gas unit’s per-day, the highest demand in Textile industry and fabric has the minimum gas requirement. In result, the textile industry is more energy consumed sector in Pakistan and there is need to provide more electricity and gas to more energy deficient sub-sectors on immediate basis. In the IPR report (Ashraf M. Hayat ,2015) Textile comes in the top of the highest loss of output industry as they operate in eight hour shifts with load shedding throughout the year.
The highest estimate in loss of output of 227 Billion Rupees and lowest estimate loss of output is 75 Billion Rupees. Their research showed that increase to 12 hour shift with half year of load shedding decreases the losses of output showing that significant effects of shortage of electricity. This led to losses in export industries of textile of 22% and caused 68% of export order to be delayed. Our energy sector has been unable to keep with our growth as from 2008 to 2013 Pakistan GDP has increase cumulative of 15% however energy production has increased by only 4%. And when our textile industry tries to rectify the situation by trying to produce their own electricity the government increase the price of fuel which leads to increase in cost of production making the products of the textile industries uncompetitive.

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The Pakistan textile sector is suffering in the worst period...

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