Coronavirus: Pakistan's Exports Crash Amid Global Health Crisis

[RiazHaq]

https://www.riazhaq.com/2020/03/coronavirus-pakistans-exports-decline.html

Pakistan Textile Industry was celebrating a big milestone with 20% jump in exports in February 2020 when coronavirus struck a heavy blow. Some western retailers canceled orders while others put them on hold as the virus spread to Western Europe and the United States in late February and early March. Then came the lockdown in Pakistan that shut down factories and halted transport in Pakistan.


Here's how Guido Schlossman, President and CEO of Synergies Worldwide, a global supply chain management firm with an office in Pakistan, summed up the situation for Sourcing Journal: “Most clients have either cancelled or put orders on hold...That would have huge ramifications and losses, and the fear is that most small factories may shut, whereas the mid and big factories will have huge financial liabilities and losses.” “Ninety-five percent of clients have either cancelled, put on hold or given new delivery dates ranging from 4-6 weeks delay to about 8-10 months,” Schlossman said. “That is how huge the holding period and losses would be for the factories.”

“All over Pakistan it’s a complete lockdown in all the provinces everywhere,” Hafiz Mustanser Ahmed, managing director of Lahore-based factory U.S. Apparel and Textiles, told Sourcing Journal last week.U.S. Apparel & Textiles, which typically produces 100,000 garments a day, is seeing “huge, huge” order cancellations, Ahmed said.

“The transportation when it comes to taking the employees to the factories or the public transportation, it’s all 100 percent closed. All the factories are closed.” For now, moving goods back and forth between the ports and Lahore, Pakistan’s second-biggest textile manufacturing hub after Karachi, is still allowed, but there simply aren’t many goods to move, said Ahmed, whose factory produces denim bottoms for Levi’s, Target, H&M, J.Crew, Primark and Costco, to name a few.

Other Asian garment exporting nations face a similar situation. Bangladesh has issued stay-at-home orders and India has ordered a 21-day nationwide lock-down. The difference is that Pakistan exports had just begun to recover when the COVID-19 global pandemic struck. Now demand for apparel in the western markets is not likely to materialize for at least a month or two. Meanwhile, job losses in Pakistan are almost certain. A prolonged slump in the west will spell disaster for Pakistan's exports and delay the nation's economic recovery.

Pakistan's service economy will also suffer in a prolonged lock-down. Service sector accounts for 50% of the world GDP and 54% of Pakistan's GDP. Social distancing will significantly impact the services, particularly retail, restaurants, travel, transport and education sectors. Imran Khan has expressed fear that the pandemic will devastate the economies of developing countries. “My worry is poverty and hunger," Khan said. "The world community has to think of some sort of a debt write-off for countries like us, which are very vulnerable, at least that will help us in coping with (the coronavirus).”


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https://www.riazhaq.com/2020/03/coronavirus-pakistans-exports-decline.html

 

[El Sidd]

Feed and clothe people locally now

 

[BATMAN]

If Imran Khan and ministers had any brown matter, they would have foreseen it coming and have had taken measures and place controls.

And don't label Riaz Haque as patwari and start abusing him.

 

[PakFactor]

If Imran Khan and ministers had any brown matter, they would have foreseen it coming and have had taken measures and place controls.

And don't label Riaz Haque as patwari and start abusing him.

Tell us wise one what measures could he have taken to prevent an export crash? It would have happened regardless as nations are shutting down borders and going into lock down. Patwari

 

[V. Makarov]

Feed and clothe people locally now

So they can pay the industries by giving them the extra money that the government just printed lol.

 

[El Sidd]

So they can pay the industries by giving them the extra money that the government just printed lol.

To kia karen. Jang karlen?

 

[GriffinsRule]

Feed and clothe people locally now

What? Go and buy the said clothes with money and you will feed the people making them.

On a separate note, the textile industry could try to shift to making masks perhaps to keep exports and revenues flowing, but not sure how quickly or easily this transition can take place.

 

[El Sidd]

What? Go and buy the said clothes with money and you will feed the people making them.

On a separate note, the textile industry could try to shift to making masks perhaps to keep exports and revenues flowing, but not sure how quickly or easily this transition can take place.

Yeah PM in his first ever address says everyone is stunted growth and gave then calves and chickens to raise and eat.

I really really really think if government is serious it should ask the industry to do that in return for tax incentives.

but do you have work and occupational safety of the labor force ensured?

then hello no.

can't let them die at home to sell a brand overseas. not that stupid sir not that stupid

 

[imrankhan7250]

What i cannot understand is why our pseudo economists are more worried about just 10% of GDP while not worried about our 90% of GDP?
MY dear intellectuals and economists please raise your voice for 90% of our economy.

 

[RiazHaq]

#Economic activities in #Pakistan continue as some retailers still buying. “Pakistan is expected to achieve some 50% export target this month (March)..US retail chain Costco is still taking supplies.." Govt trying to make sure #agriculture unhurt. #exports https://tribune.com.pk/story/2185785/2-economic-activities-continue-countries-take-orders/

The rice industry, whose exports are worth $2 billion a year, has also managed to operate. The government will not charge demurrages for delay in clearance of import and export containers at ports.

However, many other industries and services sector, except for the essential ones, will bear losses of billions of rupees due to lockdown in almost the entire country to contain the coronavirus pandemic. The Express Tribune tries to estimate damages to the national economy. “Pakistan is expected to achieve some 50% export target this month (March),” Pakistan Business Council (PBC) CEO Ehsan Malik said.

“The US retail chain Costco is still taking supplies from around the world. Besides, many Asian countries remain operational,” he said.

Pakistan’s average exports came in slightly lower than $2 billion a month in the first eight months (Jul-Feb) of the current fiscal year, according to the Pakistan Bureau of Statistics (PBS).

“We are trying to make sure, in collaboration with the government, that those export industries continue to operate whose orders have not been delayed and cancelled by the international buyers,” Malik said. The list of employees of the export industries and those which are considered essential industries and services have been provided to the government and the law enforcement agencies are letting them commute between factories and homes.

These industries include food, pharmaceutical, textile and fast moving consumer goods like soaps, shampoos and detergents, which also come under the essential goods category.

“Essential food and pharmaceutical industries cannot operate in isolation and that is why we have taken permission from the government to let the packaging and printing industry operate as well,” Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Anjum Nisar said.

“Soap and sanitiser manufacturing industries also come under essential goods manufacturers since we need the two products to protect people from coronavirus,” he said.

Malik voiced fear that exports may gradually drop to a very low level in the next three to four months, but stressed that they would gradually return to normal by December 2020. Besides, non-essential industries and services would be badly hit by the lockdown. Many big industrial units including the three Japanese car manufacturers (Toyota, Honda and Suzuki), big textile and cement-makers including Gul Ahmed, Interloop and Lucky Cement have stopped production, according to a private TV channel.

Giving a rough estimate as to how the lockdown would impact the overall economic activity, Malik said, “One-third of the industrial production may be impacted and the share of industrial production in the overall GDP (gross domestic product) stands at around 18%.”

The share of wholesale and retail stands at around 18-20% in GDP. “It may come down by around 20%.”

The share of services sector (like doctors, bankers, lawyers, barbers, tailors and cobblers) has increased to around half of GDP over a period of time. “A majority of them may feel the heat of the melting economy except for the financial sector,” he said. Malik said the agriculture sector, whose share in GDP stood at around 50%, would remain unhurt since the government was making sure that the ready-to-harvest wheat crop was procured to achieve food security.

The State Bank of Pakistan (SBP) revised down its projection for economic growth to 3% last week compared to 3.5% before January 2020.

 

[Zibago]

If Imran Khan and ministers had any brown matter, they would have foreseen it coming and have had taken measures and place controls.

And don't label Riaz Haque as patwari and start abusing him.

Puri duniya ka business down hy zara news parh ley bongiyan marna band kar

 

[nahtanbob]

What is surprising about this ? Expect modest declines in textile exports
The real number Pakistan needs to watch is labor remmitances