Textile exports dip 5% in H1 of FY24

Sector faces challenges in reaching govt’s ambitious $25 billion export goal

LAHORE:

During the first half of the current fiscal year 2023-24, the country’s textile exports have experienced a 5% decline. Figures for the period from July to December 2023 stand at $8.283 billion, compared to $8.716 billion during the first half of FY23.

According to revised data released by the Pakistan Bureau of Statistics (PBS) on Friday, textile exports for December 2023 were $1.4 billion, up from $1.319 billion in November 2023. This represents a 6% month-on-month increase in export figures.

On a year-on-year basis, textile exports in December 2023 also recorded a slight increase of 3% in export figures. The numbers for December 2022 were recorded at $1.355 billion.

December 2023 was the only fortunate month in which textile exports witnessed a slight increase. All other eleven months of the calendar year 2023 saw a dip in export figures, indicating trouble within the country’s vibrant textile industry.

Pakistan has lost almost $1.8 billion during FY23, a decline of 9.82%. For FY24, the government has set a textile export target of $25 billion. Industry stakeholders believe that the country cannot achieve its stated export target for textiles due to overall economic uncertainty coupled with high energy prices.

“The export figures can only be doubled at the end of FY24; the industry has earned around $8 billion in the first half of FY24, so one can estimate textile exports to be between $16-$17 billion,” said an executive of a textile company.

The industry is expected to end the current FY24 with a shortfall of $8-$9 billion from the target, which is considered unfair, given that the economy was shrinking when the previous government set this target, he said.

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“The slight improvement in December figures was due to the Black Friday sales, which traditionally mark the start of the Christmas shopping season in the West,” he said, adding, “We still have to see how the industry can perform in the remaining months, keeping in mind the high energy cost locally and stiff competition in international markets.”

The breakdown of textile groups for the half-year data shows that the exports of raw cotton increased by 375% on a year-on-year basis, standing at $53 million in 1HFY24 against $11 million in the corresponding period.

Cotton yarn exports during the said period remain at $589 million against $382 million, showing an increase of 54%.

However, the cotton cloth category shows a decline of 13%, coming in at $927 million in 1HFY24 against $1,066 million in 1HFY23.

Knitwear exports come in at $2,203 million in the first half of FY24 against $2,465 million in the corresponding period, a decline of 11%. Similarly, the bed-wear sector also shows negative growth of 4%, amounting to $1,377 million against $1,428 million for the period under review.

Exports of towels for the said period come in at $500 million against $492 million, a slight improvement of 2%. Whereas, the readymade garments posted a negative growth of 9%, coming in at $1,669 million during 1HFY24 against $1,833 million in 1HFY23.

Published in The Express Tribune, January 20^th, 2024.

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