Rising expenses hurt competitiveness

Pakistan's hosiery and knitwear export industry is losing its global competitiveness due to rising production costs, delays in refunds and increasing regulatory and compliance expenses. The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has called for urgent measures to protect the competitiveness of this key export sector and safeguard export orders.

The demand was made by PHMA Central Chairman Zia Alamdar Hussain in a letter addressed to the federal secretary commerce. The letter urged the Ministry of Commerce to immediately convene a consultative meeting between PHMA representatives and officials from the Ministry of Finance, State Bank of Pakistan, Federal Board of Revenue and other relevant government institutions.

The meeting, it said, should review the problems confronting the hosiery and knitwear export sector and formulate practical measures to protect export orders and Pakistan's competitiveness. The letter revealed that the apparel, hosiery and knitwear industry was facing multiple challenges, including a historic increase in production costs, exceptionally high freight charges, load-shedding coupled with high energy tariffs, heavy taxes, liquidity problems, growing competition from regional countries and weak demand in global markets.

These factors were making it increasingly difficult for Pakistani exporters to remain competitive in international markets, secure new orders and retain existing international buyers. The letter said an extraordinary increase in sea freight had further undermined Pakistan's export competitiveness. Freight rates to some key international markets had gone up by 1.5 to 2.5 times, significantly raising the landed cost of Pakistani products.

Exporters either had to absorb the additional cost themselves, further reducing the already limited profit margins, or pass it on to buyers, making Pakistani products more expensive than those from competing countries. The PHMA chairman urged the government to help exporters cope with the exceptional increase in production, energy, freight and other business costs. In this regard, the PHMA proposed a temporary Duty Drawback on Local Taxes and Levies (DLTL) support of 6% to 8% of FOB value on a shipment basis for a limited period.