Karachi, October 18, 2023: Pakistan has reported a 10 percent decline in textile exports during the first quarter (July-September) of fiscal year 2023-24.
According to data released by the Pakistan Bureau of Statistics (PBS) on Wednesday, the export of textile products fell to $4.13 billion during the first quarter of the current fiscal year as compared with $4.58 billion in the corresponding quarter of the last fiscal year.
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Textile exports clocked in at $1.4 billion in September 2023, down 6 percent Month on Month (MoM) and 11 percent Year on Year (YoY). This was mainly due to a decline witnessed in both basic textiles and value-added segments, said analysts at Topline Securities Limited.
In Pakistani Rupee (PKR) terms, Pakistan Textile exports clocked in at Rs405 billion, down by 5 percent MoM while up 15 percent YoY.
The analysts said that a lack of energy supplies with increased electricity rates, higher interest rates, and exchange rate fluctuations were the prime reasons for the decline in Pakistan textile exports.
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Basic Textile Exports
Basic textiles witnessed an increase of 9 percent MoM and 4 percent YoY to $295 million in September 2023, where major increase came from basic cloth where export recorded at $121 million up 9 percent MoM and 50 percent YoY. Cotton cloth also up 9 percent MoM while decline 14 percent YoY to $174 million in September 2023.
Value-Added Textile Exports
Under the value-added segment, Knitwear remained a major underperformer as exports witnessed a 14 percent MoM decline to $346 million in September 2023 due to a sharp decline in volumetric sales by 14 percent MoM. Other value-added such as Readymade Garments, Bedwear, and Towels also posted a decline of 12 percent MoM, 8 percent MoM, and 3 percent MoM to $251 million, US$233 million, and $84 million, respectively.
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On a YoY basis, the value-added segment declined by 14 percent mainly due to a decline in Knitwear and Bedwear by 21 percent and 13 percent YoY respectively.
Outlook
Going forward, Cotton export is expected to rise as the favorable weather conditions have resulted in a better Cotton crop in Pakistan. Cotton arrivals as of October 15, 2023, clocked in at 5.996 million bales up 62 percent YoY.
However, elevated energy costs and a shortage of gas will continue to remain challenges to the textile industry. Besides this, a slowdown in the global economy remains a key challenge facing the sector.
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Impact of Textile Export Decline on Pakistan’s Economy
The decline in textile exports is a major concern for Pakistan’s economy as the textile sector is the country’s largest export earner and accounts for about 60% of the country’s total exports. The sector also employs millions of people and is a major contributor to the country’s GDP.
The decline in textile exports is likely to have a negative impact on Pakistan’s economy as it will lead to a decrease in foreign exchange earnings, job losses, and a slowdown in economic growth.
