Pakistan textile exports slump by 14% amid global recession

Pakistan textile exports slump by 14% amid global recession

Pakistan’s textile exports have experienced a significant slump of around 14 percent in the period of July to April 2022-2023, according to data reported by the Pakistan Bureau of Statistics (PBS).

The total textile exports stood at $13.7 billion compared to $15.9 billion in the same period last year. This decline can be attributed to the global recession, resulting in lower export orders, combined with a challenging domestic environment.

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In terms of segments, value-added products such as knitwear, bedwear, towels, and readymade garments witnessed a drop of approximately 12.6 percent year-on-year, reaching $9.69 billion in the ten months of the fiscal year 2022-2023. Basic textiles, including raw cotton, cotton yarn, and cotton cloth, slumped by 22.8 percent year-on-year, amounting to $2.37 billion. Other textile products also experienced a decline of 9.6 percent year-on-year, reaching $1.64 billion in the same period.

In volume terms, textile exports plummeted by 18.2 percent year-on-year in the ten-month period, primarily driven by a dip in basic textile exports, which were down by 25.2 percent. Value-added and other textile products also experienced decreases of 11.6 percent and 22.2 percent, respectively.

On a month-on-month basis, there was a slight increase in value-added exports by 0.4 percent in April 2023, amounting to $0.86 billion. However, this increase was offset by a decline in readymade garments by 10.5 percent in dollar terms due to a drop in prices by 10.3 percent. Knitwear, bedwear, and towels posted increases of 3.3 percent, 10.8 percent, and 1.0 percent, respectively.

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In terms of basic textiles, exports decreased by 6.9 percent month-on-month. The decline was mainly due to a decrease in cotton cloth exports by 7.1 percent, while cotton yarn exports declined by 6.3 percent.

The sluggishness in textile exports can be attributed to various factors, including domestic challenges and weakening global demand. Analysts expect an increase in textile exports in volumetric terms as inventory pileup gradually declines and demand resurges in export destinations. However, the decline in product prices is expected to offset the overall impact.

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The domestic economy continues to pose challenges for textile players, including issues such as the unavailability of locally produced cotton, delays in the clearance of imported cotton and other essential inputs, elevated gas and electricity tariffs, and increased finance costs. Overcoming these obstacles will be crucial for the recovery and growth of the textile sector in Pakistan.

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