ISLAMABAD: Exports during the month of April plunged by 54 per cent to $957 million from $2.08 billion a year ago following the order deferrals and cancellations due to the impact of coronavirus on the global economy.

The data released by the Pakistan Bureau of Statistics (PBS) on Tuesday showed the impact of global economic slowdown mainly in the north American and European countries — top export destination for Pakistani goods — brought down the country’s total export proceeds during the month.

Exports were expected to fall during the month of April as only a few buyers were honouring their import commitments with local manufacturers following the demand contraction in the wake of pandemic.

In comparison, the impact of the coronavirus during March was significantly less as exports during the month declined by 8.46pc year-on-year to $1.807bn.

The steep fall in exports during April, however, is also due to the closure of shipping lines as arrival of exports containers at ports also declined by 27pc during the month. Exporters withheld their consignments after receiving cancellation or deferment messages from their international buyers.

In addition to this, as many as 7,000 export cargo containers are currently parked at Karachi ports with nowhere to go as global shipping has also come to a halt.

Moreover, exports through the land routes were almost non-existent during the month as Iran, Afghanistan and Pakistan shutdown their respective borders to contain the pandemic.

Cumulatively, exports during July-April fell to $18.408bn compared to $19.16bn over the corresponding months of last year, indicating a decline of 3.92pc.

In order to offset some of the impact of falling exports, the government has recently allowed exports of textile masks.

On the flipside, exporters have said that they are now receiving export orders regarding anti-bacterial and anti-fungus cloth, pillows cover, medical gowns, towel, bedsheets, and masks. Provincial governments of Sindh and Punjab have also allowed industries to resume operations which spur economic activity and help increase exports.

In the pre-covid-19, the government projected exports during the ongoing fiscal year to reach $26.187bn, from $24.656bn in FY19.

Meanwhile, the imports continued their downward trend, providing some breathing space to the country despite a plunge in exports.

The data showed imports falling to $37.905bn during the first 10 months of current fiscal year, down 16.50pc, from $45.393bn in the same period last year.

The decline in the value of imp­orted goods in April was 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 current fiscal year mainly on the back of a double-digit fall in imports.

In absolute terms, the trade gap narrowed to $19.497bn during 10MFY20, from $26.233bn over the corresponding months last year. In April, the deficit plunged 18.82pc to $2.131bn, from $2.625bn in the same month last year.

The government has recently released refunds as well as cash subsidies to export-oriented sectors to help them overcome liquidity crunch.

The Federal Board of Revenue released refunds and rebates to the tune of Rs116.961bn in July-April as against Rs65.150bn over the corresponding period of last year.

In addition to this, the commerce ministry has so far in the last three quarters released over Rs47bn to the textile and non-textile sectors as cash subsidies under the PM’s Export Enhan­cement Package. Of these, an amount of Rs45bn was released to textile and clothing sectors between July-April under the drawback of local taxes and levies (DLTL).

On April 6, the last tranche of Rs6bn was released for the textile and clothing sector.

In a statement, Adviser to Prime Minister on Commerce Razak Dawood said the oronavirus has changed the world as we knew it and business processes will be completely different. He said such difficult times always bring out new opportunities, new products, new ways of thinking.

“This is a golden opportunity for Pakistan to pursue the ‘Make in Pakistan Policy’”, adviser said.

He also pointed out that many businesses are on the verge of closure and labourers are facing job losses.

“Under the circumstances, the need of the hour is a policy whereby we do not import, but make products in Pakistan”, the advisor suggested for indigenisation of Pakistan’s needs.

Dawood said the commerce ministry is aggressively pursuing changes in tariff structure for the upcoming budget. “The focus of these measures is to facilitate local production thereby moving towards local manufacturing, pursuing our Make in Pakistan Policy,” he said.

Published in Dawn, May 6th, 2020