ISLAMABAD: Exports during the month of April plunged 54 percent to $ 957 million from $ 2.08 billion a year ago after deferrals and order cancellations due to the impact of the coronavirus on the global economy.
Data released by the Pakistan Statistical Office (PBS) on Tuesday showed the impact of the global economic slowdown, mainly in countries in North America and Europe, the main export destination for Pakistani goods, reduced the total output of exports of the country during the month.
Exports were expected to fall during the month of April, as only a few buyers met their import commitments to local manufacturers after demand contracted in the wake of the pandemic.
In comparison, the impact of the coronavirus during March was significantly less, as exports during the month decreased by 8.46pc year-over-year to $ 1.807 billion.
However, the sharp fall in exports during April is also due to the closure of shipping lines, as the arrival of export containers at ports also decreased by 27% during the month. Exporters withheld their shipments after receiving cancellation or deferral messages from their international buyers.
In addition to this, up to 7,000 export cargo containers are currently parked at Karachi ports with nowhere to go as global shipping has also stopped.
In addition, exports through land routes were almost non-existent during the month, as Iran, Afghanistan and Pakistan closed their respective borders to contain the pandemic.
Cumulatively, exports during July-April fell to $ 18,408 billion compared to $ 19.16 billion in the corresponding months of last year, indicating a decrease of 3.92 percent.
In order to offset some of the impact of the drop in exports, the government has recently allowed the export of textile masks.
On the other hand, exporters have said that they are now receiving export orders regarding antibacterial and antifungal fabrics, pillowcases, medical gowns, towels, sheets and masks. The Sindh and Punjab provincial governments have also allowed industries to resume operations that stimulate economic activity and help increase exports.
In pre-covid-19, the government projected exports during the current fiscal year to reach $ 26,187 billion, from $ 24,656 billion in fiscal year 19.
Meanwhile, imports continued their downward trend, providing a breather for the country despite a drop in exports.
The data showed that imports fell to $ 37,905 billion during the first 10 months of the current fiscal year, a decrease of 16.50 percent, from $ 45,393 billion in the same period last year.
The decrease in the value of imported goods in April was from 34.49pc to $ 3,088bn against $ 4,714bn during the same month last year.
As a result, the trade deficit narrowed by 25.68pc in the first 10 months of the current fiscal year, mainly due to a double-digit drop in imports.
In absolute terms, the trade gap narrowed to $ 19,497 billion during 10MFY20, from $ 26,233 billion during the corresponding months of last year. In April, the deficit fell 18.82pc to $ 2,131bn, from $ 2,625bn in the same month last year.
The government has recently released cash rebates and subsidies to export-oriented sectors to help them overcome the liquidity crisis.
The Federal Revenue Board issued rebates and refunds in the amount of Rs116,961bn in July-April versus Rs65,150bn during the corresponding period last year.
In addition to this, the trade ministry has so far released over the past three quarters more than Rs 47 billion to the textile and non-textile sectors as cash subsidies under the Prime Minister’s Export Improvement Package. Of these, an amount of Rs45bn was delivered to the textile and clothing sectors between July and April under the inconvenience of local taxes and charges (DLTL).
On April 6, the last tranche of Rs6bn was launched for the textile and clothing sector.
In a statement, the adviser to the Prime Minister of Commerce, Razak Dawood, said that oronavirus has changed the world as we knew it and that business processes will be completely different. He said that such difficult times always bring new opportunities, new products, new ways of thinking.
“This is a golden opportunity for Pakistan to follow the” Make in Pakistan Policy, “said the adviser.
He also noted that many companies are on the verge of closure and that workers face job loss.
“In these circumstances, the need for the hour is a policy by which we do not import, but manufacture products in Pakistan,” suggested the adviser for the indigenization of Pakistan’s needs.
Dawood said the commerce ministry is aggressively seeking changes to the rate structure for the next budget. “The objective of these measures is to facilitate local production, moving towards local manufacturing, following our Make in Pakistan policy,” he said.
Posted in Dawn, May 6, 2020
Kajal Khatri is one of our senior news editors. Kajal graduated from IGNOU in 2010 with a degree in Business Management. She likes social media trends, being semi-healthy, and trying new foods. When she isn’t writing, Kajal loves to travel. She recently visited NYC in America.