Textile exports surge to record high of $4.42bn during 1QFY22

October 18, 2021 (MLN): Pakistan’s textile exports surged to a record high of $4.42 billion during the first quarter of the current fiscal year, 27.4% higher than the textile exports of $3.47bn recorded in the same period the previous year.

The YoY rise in textile exports during 1QFY22 was mainly the outcome of rising exports of value-added segments where Knitwear, Bed-wear, Readymade garments and Towels surged respectively by 33%, 23%, 23% and 18% to $1.14bn, $803mn, $861mn and $241mn compared to 1QFY21, according to the latest data of the Pakistan Bureau of Statistics (PBS).

This increase is the result of the government’s incentives to a textile sector that includes a reduction in gas prices for export-oriented sectors, rebates for exporters, lower financing rate on LTFF (Long term financing facility) and export refinance scheme provided support in these crucial times, a report by Arif Habib Limited (AHL) said.

While in the month of September alone, textile exports jumped by 25% YoY to $1.5bn when compared to $1.2bn reported in Sept’20.

On a sequential basis, textile exports inched up by 2% MoM despite logistics and supply chain issues such as congestions on ports and higher freight costs, the report said.

On the import front, the textile group saw a 75.5% increase during 1QFY22 to stand at $1.19bn

During Sept’ 21, the country witnessed an increase of 45.6% YoY/ 11.4% MoM in textile imports to $415mn. In absolute terms, the import of raw cotton was $135mn in Sept’21 against $88mn recorded in Sept’20.

Moving forward, it is expected that the demand for Pakistan's textiles globally is likely to remain strong on the back of a strong demand given currency depreciation.

In the long run, the sector’s fate depends on better cotton-seed quality, improvement in value addition, removal of capacity constraints and investment in the latest technology. It is believed that the new textile policy that has been delayed due to disagreement within stakeholders on the quantum of electricity and gas subsidies, would help improve the sector’s dynamics, Zeeshan Azhar, Analyst at Foundation Securities said.

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