November 19, 2020 (MLN): Textile exports during the month of October 2020, clocked in at a record US$1.3 billion, jumped by 6% YoY and 8.4% MoM.
This takes the total textile exports in 4MFY21 to reach at US$4.8 billion, up by 3.78% YoY from US$4.586 billion.
The rise in exports can be attributed to the strong orders for winter season in the West, which usually tend to be shipped by mid-October, a report by Intermarket Securities highlighted.
According to the report, most of the large exporters have orders filled till March 2021.
The data released by Pakistan Bureau of Statistics (PBS) revealed that the rise in textile exports during 4MFY21 was mainly the resultant of rise in exports of value added segments where Towels, Knitwear, Bed-wear and Readymade garments have surged respectively by 12.35% YoY, 12.3%YoY, 10% YoY and 4.66% YoY to US$283.25 million, US$1.18 Billion, US$899.5 million and US$947.4 million recorded compared to 4MFY20.
In the month on October alone, the exports Towels, Knitwear, Bedwear and Readymade garments witnessed upsurge of 10% YoY, 17.5% YoY, 14.2% YoY and 3% YoY to US$78.6 million, US$322.7 million, US$248 million and US$246 million repectively.
On the other hand, Textile imports during the month of Oct’20 declined 5% MoM to US$270.37 million, while up by a sharp 77% YoY. Within the Textile segment, Raw cotton imports fell by 7% MoM but up by 8.9x YoY, which is due to the significant shortfall in domestic cotton production.
According to the report, due to the uncertainty around the second wave and fresh lockdowns in Europe, Pakistani textile exporters evidently hesitated from importing cotton during the month despite healthy orders. The report also mentioned that only 50% of the cotton requirement for the sector is available in the market (which has led to a 10 year peak in local cotton prices of 9,500/maund).
On a cumulative basis, during 4MFY21, the import of textile related products grew by 56.8% YoY to US$947 million primarily due to 522% YoY increase in Raw Cotton imports to US$290.3 million from international markets.
In the coming months, the exports of textile related products are expected to increase due to the inlay of export orders till March (ahead of summer holidays in Europe and US). In particular, the demand for home textiles will remain stronger than that of readymade garments, because the second wave across Europe and US will keep high-street sales at subpar levels, according to the brokerage house. Moreover, an appreciating PKR is also a risk factor, but it will be partly offset by lower cost of imported cotton, the report added.
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