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Thursday March 28, 2024

Textile exports rise 8.16pc to $1.16bln in Jan

By Javed Mirza
February 17, 2019

KARACHI: Pakistan’s textile and clothing exports recorded 8.16 percent year-on-year surge to $1.167 billion in January, taking the total exports for the first seven months of the current fiscal year to $7.81 billion, up 1.19 percent, as easing duties on raw materials’ imports gave impetus to the industry, official data showed on Saturday.

In January, textile exports recorded a growth of 2.46 percent compared with $1.139 billion in December, the Pakistan Bureau of Statistics (PBS) reported.

Mirza Ikhtiar Baig, senior vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said the rupee devaluation and reduced duties on imported raw materials would help the country’s annual exports reach $25 billion.

“(But), there is no way that the target of $27 billion could be achieved for the current fiscal year,” Baig added.

FPCCI official, citing the central bank’s data, said private sector credit stood at Rs570 billion during the period under review, of which Rs470 billion was working capital, which was usually invested in real estate and stock markets.

“Only Rs100 billion would be spent on imports of plant and machinery,” he said. “Having said that, with 14 percent markup and US dollar hedging at over Rs150, import of plant and machinery is not feasible at all.” In January, textile machinery imports fell 1.36 percent to $55.93 million, while imports of textile machinery declined 10.64 percent to $308.608 million in the seven months of the current fiscal year, according to the PBS.

In January, cotton yarn exports increased 11.33 percent year-on-year to $86.614 million. Knitwear exports rose 16.25 percent to $248.58 million. Bedwear exports increased 6.69 percent to $193.30 million. Readymade garments’ exports surged 9.94 percent to $256.31 million, while cotton cloth fetched $181.369 million in exports revenue during the month under review, down 0.59 percent over the same month a year earlier.

An industrialist said exports are largely dependent on imported inputs. “Fluctuation in rupee value and costlier utilities rendered local products uncompetitive in the international markets.”

Furthermore, recurrent energy crisis remains unaddressed, as lack of availability of system gas and costlier re-gasified liquefied natural gas forced several smaller mills to close operations, which was another negative for textile exports sector.

“We expect the performance of textile sector to remain upbeat in the coming months owing to government’s commitment towards the improvement of the sector,” analyst Taimoor Asif at brokerage Pearl Securities said. “The decrease in duties on raw materials, concessionary gas and electricity prices along with the withdrawal of duties on imported cotton would likely to have positive impact on country’s textile exports.”

Analysts also expect the impact of rupee depreciation to start reflecting during the second half of the current fiscal year. Pakistani firms also received good response at a recently-held Heimtextil 2019, a world’s famous fair for home and contract textiles in Germany, paving way for further international orders.