Ray of hope: Healthy export figures expected in December

Exporters optimistic after November shipments rise 13.2%.

KARACHI: The textile industry is expecting to fetch better export proceeds in the current month due to the Christmas season, low cotton prices and a recent increase in raw cotton exports, according to industry players.

The increase in exports in November has also raised hopes of the exporters as shipments jumped significantly in the month to $1.1 billion, up 13.2% compared to the same month of last year.

After showing an unsatisfactory performance in the first four months (July-October) of fiscal year 2014-15, yarn exports rebounded a massive 31% in November to $182 million, up 31% compared to $138 million in the same month of previous year, mainly because of demand from China, according to a report prepared by InvestCap Research.

“Going ahead, we expect exports of the textile segment to pick up in December as the festive season is in full swing and there is improvement in electricity supply to the sector,” BMA Capital said in another report.

“We believe a healthy trend in volumetric sales plus reduced raw material prices (down 27% year-on-year) will provide a notable lift to the margins in fiscal year 2015.”

At a time when the country’s overall exports are declining, the textile sector – which contributes about 50% of the total – is providing the vital support. In the sector, most of the growth has come from sales of finished products to the European Union since the country got duty benefits under the Generalised System of Preferences (GSP) Plus at the start of 2014.

Total exports in the first five months (July-November) of 2014-15 dropped 4.18% year-on-year to $10 billion compared to $10.4 billion last year. However, textile exports edged up 0.93% to $5.7 billion in the five-month period.

Textile garment shipments posted a growth of 9.74% year-on-year to $827 million, knitwear and bed wear exports improved 11.7% and 0.9% to $1 billion and $0.9 billion respectively mainly due to exports to the EU.

However, cotton cloth and cotton yarn were the major products that depicted a year-on-year decline of 13% to $1 billion and 9.3% to $818 million respectively.

Published in The Express Tribune, December 24^th, 2014.

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