Textile exports increase 12.1pc to $1.148 billion in April

KARACHI: Textile exports increased 12.07 percent year-on-year to $1.148 billion in April, but they decreased 4.5 percent month-on-month, official data showed on Monday.

Pakistan Bureau of Statistics (PBS) data showed that highest surge was witnessed in cotton yarn exports, which rose 28.66 percent to $129.75 million in April, followed by knitwear exports (up 23.56 percent to $230.03 million) and bedwear exports increased 2.49 percent to $181.39 million in April. Readymade garments exports posted a 6.47 percent rise to $203.584 million, while cotton cloth fetched $193.36 million in April, up 1.69 percent, according to the PBS.

Analyst Ayesha Ahmed at First Capital Equities said value-added exports increased due to growing demand and improvement in export competitiveness after currency depreciation. Rupee has lost around 10 percent against US dollar since December last year.

“Moreover, textile demand is heavily dependent on seasonality and the value added segment has started picking up growth as summer season starts,” Ahmed said.

“Demand for cotton yarn has been on the rise due to Bangladesh and China’s import of cotton yarn potentially due to lower yarn supply from India.”

Textile exports rose 8.13 percent to $11.13 billion in the first 10 months of the current fiscal year of 2017/18, PBS data showed.

Analysts said export package announced by the government in January last year provided a temporary boost to the exports, which are now slowing down, as the incentives-dependent growth is unsustainable.

Exporters complained that the incentive package was not properly implemented.

Jawed Bilwani, chairman of Pakistan Apparel Forum said exporters are facing liquidity crunch, “as government has not paid refunds in last the five months”. “Exporters have to buy inputs through financing, which increases costs,” Bilwani added.

Analysts said the country’s exports are import-based as 70 percent of inputs are imported. Currency devaluation did not give benefit rather “it hurt”.

A textile exporter said Pakistan is only getting spillover orders and that too would stop coming once the competitors enhance their production capacity.

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said the country’s total exports have declined to around $20 billion from $25 billion, in which textile sector’s share remains at 61 percent.

“The area of concern is that Pakistan’s competitors have set big targets for textile exports while Pakistan remains far behind them,” the apex trade body said in a report. “Bangladesh set textile exports target at $60 billion and India at $30 billion.”

The FPCCI identified various problems, being faced by textile sector, including high cost of doing business, multiple taxes and surcharges, low production of cotton bales, limited implementation of government support package and costlier utilities and raw materials available to the textile sector.