Islamabad, July 18, 2023 – Pakistan’s textile exports have experienced a significant drop of 15% in the fiscal year 2022-23, as per data released by the Pakistan Bureau of Statistics (PBS) on Tuesday.
The country’s textile exports amounted to $16.5 billion, compared to $19.33 billion in the previous fiscal year.
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Insight Research analysts noted that the government had set a target of achieving textile exports worth $25 billion during the period under review. However, a combination of domestic and global challenges has impacted the outlook.
The slowdown in textile exports can be attributed to suppressed demand caused by recessionary fears in Western regions, particularly in the US and Europe. Additionally, factors such as gas shortages, rising working capital costs, lower cotton arrivals, and uncertainty in foreign exchange rates have further contributed to the decline.
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Segment-wise, value-added products such as knitwear, bedwear, towels, and ready-made garments witnessed a drop of approximately 13% year-on-year (YoY), reaching $11.6 billion in FY23. Similarly, basic textiles including raw cotton, cotton yarn, and cotton cloth experienced a slump of around 21% YoY, amounting to $2.9 billion. Other textile exports also plunged by approximately 10% YoY, reaching $1.9 billion in FY23.
In terms of volume, textile exports declined by 15% YoY in FY23 compared to the same period last year. This decline was primarily driven by a 20% YoY drop in basic textile exports, followed by a 10% decline in value-added products and a 19% decline in other textile exports.
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In June 2023, value-added exports witnessed a volumetric increase of 16% and a marginal price increase of around 1%, resulting in a notable 17% month-on-month (MoM) increase to reach $1.03 billion. Among the value-added exports, knitwear emerged as a major contributor, experiencing an 18% MoM increase, followed by readymade garments and bedwear with a 19% MoM increase each.
On the other hand, basic textile exports in June 2023 declined by 2% (with a 1% increase in volume and a 3% decrease in price), totaling $274 million compared to $279 million in May 2023. The decrease in basic textile exports was primarily driven by a 7% decline in cotton cloth, mainly due to a 7% decline in volume. However, cotton yarn exports increased by 7% MoM.
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Textile exports have faced multiple headwinds in the domestic environment and weak global demand. While a resurgence of demand in export regions may lead to an increase in volumetric terms, the decline in product prices is expected to offset the impact. Additionally, challenges in the domestic economy, including elevated gas and electricity tariffs, delays in the clearance of imported cotton and other essential inputs, and increased finance rates, will continue to hinder textile players. However, the promising outlook for cotton production in the upcoming year may provide some relief to local textile manufacturers.
