July 23, 2021 (MLN): The total export of textile products witnessed a record high of $1.7 billion in the month of June 2021 as it surged by 57.8% MoM and 73.1% YoY when compared with the figures of the previous month and year respectively.
This takes the total textile exports in the fiscal year to reach $15.4bn as against $12.5bn, depicting an increase of 23% YoY, as per data released by the Pakistan Bureau of Statistics (PBS).
According to the report by Intermarket Securities (IMS), the sharp mom increase is due to the pent-up demand following two consecutive months of decline on account of reduced working hours during the month of Ramadan and unusually long Eid holidays.
It is expected that exports would continue their present growth momentum in the coming months, ahead of Winter season holidays (orders expected to roll out from August), and easing of restrictions in the West.
The rise in textile exports during June-July FY21 was mainly the outcome of rising exports of value-added segments where Towels, Knitwear, Bed-wear, and Readymade garments surged respectively by 31.8%, 36.6%, 28.9%, and 18.8% to $937mn, $3.82bn, $2.77bn and $3.03bn compared to FY20.
On the other hand, textile imports during the month of June 2021 dropped by 3% MoM to stand at $352mn while on yearly basis, the country witnessed a surge of 80% YoY in textile imports. Within the textile segment, Raw cotton imports jumped by 24.5% MoM to $162mn.
On a cumulative basis, during the fiscal year 2020-21, the import of textile-related products grew by 52.8% YoY to $3.87bn mainly due to a 68% YoY increase in Raw Cotton imports to $1.48bn from international markets.
Going forward, the demand for Pakistan’s textiles globally is likely to remain strong due to continued rerouting of orders out of China and regional Asian countries such as Bangladesh, which are witnessing a sharp spike in Covid-19 cases, Abdul Ghani Mianoor, an Analyst at IMS said.
The capacity enhancements by various textile exporters are an indication of strong order flows, while exports’ competitiveness is also supported by continued rationalization of tariffs on raw materials and power subsidies from the government. The risk of revocation of the GSP+ Status seems unlikely now.
Furthermore, the arrival of the new Textile Policy (likely in August) will also ensure sustained competitiveness of the sector and will be another impetus for Textile stocks, he added.
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