Industry warns surging energy costs and Middle East turmoil threaten export orders
Key Takeaways:
- Textile sector (60% of exports, 8.5% of GDP) faces severe working capital crunch due to energy costs and Middle East instability.
- APTMA has formally requested SBP to increase export refinance facilities to help meet orders.
- Enhanced refinance is seen as critical to boosting exports, economic stability, and global competitiveness.
Karachi – The All Pakistan Textile Mills Association (APTMA) has urgently approached the State Bank of Pakistan (SBP) to enhance export refinance facilities, warning that growing working capital constraints are severely hampering the country’s single largest export sector.
In a formal letter addressed to SBP Governor Mr. Jameel Ahmad, APTMA Chairman Kamran Arshad termed the textile industry the “main stay” of Pakistan’s economy, noting its 60 percent share in total exports, 8.5 percent contribution to national GDP, and 40 percent share of manufacturing sector employment.
However, the chairman said the sector—a key driver of foreign exchange earnings—is now caught in a perfect storm of elevated energy costs, persistent supply chain disruptions, and mounting uncertainty linked to the evolving geopolitical situation, particularly in the Middle East, coupled with domestic economic pressures.
“These significant challenges are adversely affecting the sector’s operations and growth trajectory,” the letter stated.
Sources within APTMA said textile exporters are struggling to fulfil orders due to delayed and inadequate access to financing. Without immediate relief, export targets could slip further, risking Pakistan’s hard-won position in global markets.
The association has therefore respectfully requested the central bank to immediately enhance export refinance facilities, enabling exporters to efficiently meet their working capital requirements.
Industry observers believe that an enlarged refinance window would not only help the textile sector navigate current headwinds but also reinforce Pakistan’s standing in international markets, ultimately contributing to an upsurge in exports and greater economic stability.
The SBP governor has not yet issued a formal response, but banking circles indicate the request is under review amid tight monetary conditions.
