Textile exports post 3% decline in Jan
PHOTO: FILE
Pakistan’s textile exports for January 2023 posted a Month-on-Month (MoM) decline of 3%, recording $1.32 billion only.
In rupee terms, exports clocked in at Rs309 billion, increasing by 2% MoM.
“Value-added textile exports fell by 3% MoM to $932 million mainly due to an 8% drop in the exports of readymade garments and knitwear and 5% drop MoM, said Nasheed Malik, Textile Analyst at Topline Research.
Towel and bed-wear exports, however, witnessed an increase of 11% and 1% MoM, respectively. Basic textiles also showed an increase of 5% MoM to $231million in January 2023.
Speaking to The Express Tribune, Securities Textile Textile Analyst, Ali Asif said, “Textile exports remained weak in January mainly due to the demand and supply challenges being faced by the sector. Global recession, which reduced the purchasing power in key export markets, also resulted in lower bookings of orders.”
“Inventory piled up at large global retailers, while gas shortages and increased costs of working capital in the country also played a role in the decline,” he said.
In volume terms, recovery was witnessed in value-added exports with knitwear, towels and bed-wear increasing by 13%, 10% and 8% MoM respectively, according to a Topline Securities report. Among basic textile, cotton yarn exports increased by 39% MoM whereas the export of cotton cloth declined by 6% MoM.
As compared to January 2022, Pakistan’s textile exports dropped by 15% YoY, up 13% YoY in rupee terms due to a 13% YoY decline in value-added and 24% YoY in basic segment as global demand slowed down, the Topline Securities report added.
A YoY decline in value-added bed-wear, knitwear and readymade garments was recorded at 20%, 13%, and 11% respectively. In volumetric terms, bed-wear and knitwear declined by 16% and 10% YoY, respectively.
“A slump in global demand is the reason behind the continuous decline in textile exports and the trend is expected to continue in the coming months. The increase in gas and electricity tariffs will also make the country’s textile exports even more uncompetitive against regional countries,” warned Arsalan Hanif, Textile sector Analyst.“The mini budget and huge increase in gas and electricity tariff is disastrous for the economy and industry,” said Faisal Moiz Khan, President of the North Karachi Association of Trade and Industry (NKATI). If the government does not withdraw the increase in taxes and tariffs made through the mini budget, industries will have to shut down. This will also render millions of workers jobless while exports will also be adversely affected, he cautioned.
The NKATI president said that the government has increased the gas and electricity tariffs and, at the same time, also indicated that the subsidy will be phased out, which will further increase the cost of production.
In the first seven months of FY2023, Pakistan recorded textile exports of $10.04 billion, down by 8% YoY and up 21% YoY in rupee terms.
Published in The Express Tribune, February 18th, 2023.
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