Pakistan textile exports hit 11-month low in July 2022

KARACHI: Pakistan textile exports hit 11-month low in July 2022 to $1.48 billion, down 13 per cent month on month (MoM).

Analysts at Topline Securities on Tuesday said that tis was mainly due to decline witnessed in value-added segment down by 12 per cent MoM, mainly due to (i) Eid holidays during the first half of July, (ii) Lack of energy supplies, and (iii) global economic slowdown.

In Pakistani Rupee (PKR) terms, the same has clocked in at Rs325 billion, down by 7 per cent MoM.

During the month, the Government of Pakistan closed down the gas supplies to both export and non-export industry in Punjab till July 9, 2022. The decision was made to divert more LNG to the power sector for more electricity generation to mitigate power outages.

Under Value-added division, Ready-made segment remained major underperformer as exports witnessed 17 per cent MoM decline to $305 million during July 2022 due to sharp decline in volumetric sales down by 7 per cent MoM.

Other value-added players such as Knitwear, Bedwear and Towel also posted decline of 8 per cent MoM, 11 per cent MoM, and 18 per cent MoM to $435 million, $254 million and $75 million, respectively.

Basic textiles also witnessed decline of 14 per cent MoM to $258 million in July 2022 (down 5 per cent YoY), where major decline came from cotton yarn where exports touched $71 million (down 24 per cent MoM).

As compared with July 2021, Pakistan textile exports marginally up by 1 per cent YoY (+38 per cent YoY in PKR terms) in July 2022 due to growth in value added segment.

Moving forward, increase in energy tariff and slowdown in global economy are few key challenges textile sector could face going ahead.