Textile: Exports rebound in March, up by 30% YoY

April 19, 2021 (MLN): The total export of textile products rebounded in March 2021 as it surged by 10% MoM and 30% YoY(albeit from a low base, due to the Covid-19 lockdown last March) to clock in at $1.35 billion.

The sharp MoM increase is seemingly due to the end of slow demand in the first two months of the year, before picking up ahead of the Spring and Summer seasons, a report by Intermarket Securities said.

During the month, double-digit growth of 15.74% MoM witnessed in Bedwear exports. Knitwear exports also jumped by 7.5%MoM while that of Readymade garments declined by 10% MoM. Cotton yarn exports fell by a modest 5% MoM potentially due to the volatility in the global cotton market during the month, largely attributed to the US-China trade rift.

On yearly basis, the growth in exports of value-added segments contributed to an increase in overall exports from the sectors.

Product-wise data issued by PBS showed that the exports of Towels, Knitwear, Bedwear, and Readymade garments witnessed an upsurge of 21% YoY, 49.6% YoY, 43.7% YoY, and 22.9% YoY to $81.4mn, $313.87mn, $235.3mn, and $256.9mn respectively in March’21. The export of cotton yarn posted growth of 39% in March from a year ago, followed by cotton cloth 8.7%, and cotton carded 100%. The export of yarn other than cotton yarn also recorded a growth of 56.87% during the month under review.

Cumulatively, during July-March FY21, the value of overall textile exports reached $11.35bn as against $10.41bn over the corresponding months of last year, showing a growth of 9.06% YoY.

The rise in textile exports during 9MFY21 was mainly the outcome of rising exports of value-added segments where Towels, Knitwear, Bed-wear, and Readymade garments have surged respectively by 16.8% YoY, 20.9%YoY, 16.5% YoY, and 4.53% YoY to $692mn, $2.78bn, $2bn and $2.26bn compared to 9MFY20.

Meanwhile, the commodities that witnessed negative growth in trade during July-March FY21 included raw cotton, exports of which decreased by 96.5%, from $17.002mn to $0.593mn while cotton yarn decreased by 12.03%, from $819.8mn to $721mn.

Textile imports in March rose by a notable 12% MoM and 36% YoY to $386.86mn. This took total imports in 9MFY21 to $2.78bn, up by 45.4% YoY. The growth was led by an 85.58% YoY increase in raw cotton imports due to strong order flows, amid a significant shortfall in domestic cotton production during FY21TD.

In the coming months, the demand for Pakistan’s textiles globally is likely to remain strong on the back of potential rerouting of orders out of China (Xinjiang cotton issue) and several other Asian competitors, due to the resurgence of Covid-19 cases. The sector is likely to demonstrate sustained export growth thereon, due to continued government incentives (including the upcoming Policy that is pending approval), the IMS report highlighted. The recent 5% PKR appreciation will clip margins and lead to exchange losses for value-added exporters; but, given the broader global landscape, it has not yet affected the competitiveness of Pakistan’s exports, it added.

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