Textile exports dip by 30% in Feb

Stand at $1.2b in fifth consecutive month of decline

KARACHI:

Pakistan’s textile exports dipped for the fifth consecutive month as shipments dropped by 29.9% year-on-year to $1.20 billion in February 2023.

Speaking to The Express Tribune, Arif Habib Limited Head of Research Tahir Abbas highlighted that textile exports were the lowest since May 2021, when they stood at $1.05 billion.

“Administrative measures to curb imports, leading to raw material shortage for the textile industry and resultantly lower production, were the main reason for the plunge.”

The slowdown in global demand amid monetary tightening was another reason, he said.

Pakistan’s textile exports came in at $1.2 billion in February, down 11% month-on-month (MoM), according to Topline Research textile sector analyst Nasheed Malik.

However, in rupee terms, exports came in at Rs315 billion, up by 2% MoM.

Value-added textile exports decreased by 13% MoM to $812 million mainly due to lower shipments of readymade garments and knitwear, which declined by 13% and 18% MoM respectively, he said.

Towels and bed wear exports decreased by 8% and 7% MoM respectively, according to Malik. Basic textile exports registered a decline of 8% MoM to $214 million in February 2023.

In terms of volume, knitwear, towels and bed wear shipments decreased by 16%, 10% and 9% MoM respectively, whereas exports of readymade garments increased by 15% MoM.

According to Topline, among basic textiles, cotton yarn exports were down by 22% MoM whereas cotton cloth shipments were up 11% MoM.

Pakistan’s value-added segment declined on a YoY basis by 26%, 34% and 28% in the categories of bed wear, knitwear and readymade garments respectively.

Textile exports declined mainly due to import restrictions, resulting in unavailability of raw material, coupled with global recession which kept textile demand subdued, said Insight Securities textile sector analyst Ali Asif.

Besides domestic issues, there are global reasons as well for the decline in exports that have also impacted other countries.

“The decline in shipments is indicative of a wider deterioration in textile demand globally,” said Malik.

Textile exports from Bangladesh were down by 11% MoM while exports from China and Vietnam in January and February 2023 fell by 19% and 20% YoY respectively.

In the first eight months of current financial year (8MFY23), Pakistan recorded textile exports of $11.22 billion, down by 11% YoY, while in rupee terms, they were up by 19% YoY, according to Topline Research.

Exports of basic and value-added textile declined by 21% and 9% YoY respectively.

Demand from major markets, such as the US and Europe, was the key concern among textile exporters, said Nasheed Malik.

Furthermore, the recent hike in electricity tariffs will pose a challenge to the sector.

Published in The Express Tribune, March 18^th, 2023.

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