21.8 C
Jammu
Wednesday, April 24, 2024
HomePakistanPakistan: Textile sector sees decline in exports for eighth consecutive month

Pakistan: Textile sector sees decline in exports for eighth consecutive month

Date:

Related stories

IMF Executive board meetings scheduled till May 1: Pakistan not yet on the agenda

The International Monetary Fund (IMF) has not yet included...

Foreign national reportedly abducted from Islamabad

A foreign national was reportedly abducted from Islamabad on Sunday within...

Millions At Risk As Almost Half Of All Major Chinese Cities Are Sinking, Warns Study

Nearly half of China's major cities are skinking because...

Pakistan’s textile sector has faced its eighth consecutive month of decline in textile exports on a year-on-year basis, indicating persistent challenges for the industry. While May 2023 saw a month-on-month increase of 7% in textile exports, reaching $1.32 billion, there was a significant year-on-year decline of 20% compared to the same period last year.

The trend of declining textile exports on a year-on-year basis has continued for eight months, according to research conducted by Arif Habib Limited (AHL). Despite the positive momentum in May, the overall picture for the fiscal year 2023 remained negative, with textile exports totalling $15.03 billion for the 11-month period, reflecting a year-on-year decrease of 14.7%. These figures underscore the challenges faced by the textile industry and the need for sustained efforts to revive and strengthen its performance.

Nasheed Malik, an analyst at Topline Securities, confirmed that Pakistan’s textile exports experienced their eighth consecutive month of decline on a year-on-year basis. In May 2023, textile exports reached $1.32 billion, indicating a 7% month-on-month increase. In terms of Pakistani Rupees (PKR), the exports amounted to Rs377 billion, reflecting the same 7% month-on-month growth. Notably, value-added textile exports recorded $889 million, showing a 3% increase from the previous month.

Among the value-added products, towels, ready-made garments, and knitwear witnessed respective month-on-month increases of 10%, 8%, and 3%. However, bedwear experienced an 8% decline. On the other hand, basic textiles saw a remarkable 31% month-on-month increase, with cotton cloth alone increasing by 19%. In terms of volume, ready-made garments and towels increased by 8% and 5%, respectively.

Furthermore, cotton yarn and cotton cloth surged by 64% and 22% in volume, respectively. This positive trend in basic textiles can be attributed to improved orders from countries such as China and Bangladesh.

However, when compared to May 2022, Pakistan’s textile exports witnessed a year-on-year decline of 20% (with a 17% increase in PKR terms). This decline was primarily driven by a 21% decrease in value-added products and a 19% decline in the basic segment. Value-added exports experienced declines in bedwear, knitwear, ready-made garments, and towels, which decreased by 28%, 22%, 17%, and 5% respectively, on a year-on-year basis.

During the 11-month period of fiscal year 2023, Pakistan’s textile exports totalled $15.03 billion, representing a 15% year-on-year decrease (with an 18% increase in PKR terms). Basic textiles recorded a 22% decline, while value-added products declined by 13% compared to the previous year. Notably, volumetric exports of ready-made garments and knitwear increased by 46% and 9% respectively during this 11-month period.

The devaluation of the Pakistani rupee is believed to have had a positive impact on these labour-intensive segments. However, it is anticipated that textile exports for the fiscal year 2023 will range between $16-16.5 billion, indicating a decline of approximately 16% compared to the previous fiscal year.

Asim Hassan, an analyst at Insight Research, attributes the slowdown in textile exports to the global recession, lower export orders, and challenges within the domestic environment. Challenges in the domestic economy include the removal of subsidies, unavailability of locally produced cotton, delays in the clearance of imported cotton and other essential inputs, elevated gas and electricity tariffs, and increased finance costs.

Market experts anticipate an increase in volumetric terms for textile exports as the inventory pileup gradually declines and demand resurges at export destinations. However, the decline in product prices is likely to offset the impact. Furthermore, headwinds in the domestic economy will continue to hamper textile players, further exacerbating the challenges faced by the industry.

Latest stories