Business Recorder (BR) Research
Two months into FY17 and textile exports have yet to see any meaningful turnaround. According to the latest PBS data, Pakistan’s total textile exports for the two months ended August 2016 were $2.07 billion – down three percent year-on-year.
The month of August usually sees a surge in cotton exports. However, this August, raw cotton exports remained suppressed and showed a decline of 61 percent over last year. Yarn exports have shown some signs of life; increasing nine percent year-on-year for the two months ended FY17. However, given the persistent low prices, in value terms, there has been a decline of 17 percent. The cotton cloth has done poorly as well, losing 15 percent in volume and four percent in value over last year.
Coming to the value-added segment, knitwear has shown the most remarkable increase – 29 percent year-on-year in unit exports. However, the market remains down as the dollars earned from knitwear were lower by three percent. Bedwear reflected an increase of 12 percent for 2MFY17, but the increase in revenues here was also less pronounced. Readymade garments continue to do well, with a three percent increase in unit exports and four percent more revenues over last year.
Slower Chinese demand continues to exert pressure on the non-value added end of our textile industry. Yarn and cotton prices are in a slump, and the global market for knitwear, bedwear, and readymade garments is being lost due to lack of currency competitiveness and the high cost of doing business. Moreover, there are concerns of another looming cotton shortage of around four million bales in the current season. While zero-rating has been restored and LNG is being provided to textile mills, the steps seem insufficient and the industry has yet to return to its former glory.
Published: September 30, 2016.
