Textile exports dip to 21-month low in February

ISLAMABAD: Textile exports continued a downtrend to a fifth consecutive month in February by falling 29.9 percent year-on-year to $1.18 billion, lowest in last 21 months, data from Pakistan Bureau of Statistics showed on Friday.

On month-on-month basis, the textile exports have dropped by 10.7 percent.

In July-February 2022/23, the sector’s total exports declined by 11.1 percent to $11.22 billion over the same period of the last year’s exports of $12.62 billion.

Apart from the decline in value, its volumetric sales also fell sizably during the last several months. The decline could have significant implications for Pakistan's economy, as textiles are a major export for the country and a significant source of employment.

All the major components of the group including cotton cloth, knitwear, bedwear, towels, and readymade garments exports declined sizably.

In February 2023, textile group exports were $1.18 billion, while in the previous month January 2023, it was at $1.32 billion, and in February 2022, it was recorded at $1.68 billion. The exports in the month under review were the lowest since May 2021 when it was recorded at $1.05 billion.

Various factors could be attributed to a persistent decline which includes the government’s import contraction policies because of dollar shortages and also low local cotton production.

Other factors include expensive energy, which may be increasing the cost of production for textile manufacturers. Additionally, the devaluation of the Pakistani rupee and costly bank financing may also be contributing to the decline in textile exports, as these factors may be increasing the overall cost of doing business for manufacturers and reduce their competitiveness in global markets.

In February, cotton cloth exports dipped by 33.8 percent to $154.7 million compared to $233.8 million in February 2022, while over the previous month’s (January 23) exports of $159 million, they decline by 2.7 percent.

Likewise, over the corresponding month of last year, exports of knitwear in February 2023 declined by 33.5 percent to $277 million, bedwear slashed by 25.8 percent to $195.8 million, readymade garments by 28.4 percent to $255.2 million, towels by 17.4 percent to $83.7 million, cotton yarn exports down by 56.65 percent to $55.6 million.

Over the previous month, cotton yarn exports fell by 18.1 percent, knitwear by 17.7 percent, readymade garments by 12.9 percent, towels by 8.2 percent, and bedwear exports declined by 7.4 percent over January 2023.

It is to be noted that the textile sector’s exports in the last financial year (July-June FY2021-22) were at a historic high of $19.35 billion, with an increase of over 25 percent against FY21’s exports of $15.4 billion.

Food groups’ exports in February 2023 however increased by 7.4 percent to $518.8 million against $483.2 million recorded in February 2022.

Of the group, rice exports were $271.3 million against $254 million in February 2022, showing an increase of 6.8 percent.

Besides, cement exports declined by 8.4 percent during the month to $17.1 million against $18.6 million in the corresponding month. However, over the previous month (Jan 23) exports of $15 million, increased by 13.5 percent. In eight months, cement total export stood at $117.7 million against $179.6 million depicting a decline of 34.45 percent. Cement volumetric exports also declined 47.9 percent.

IMPORTS

The economy imported one percent more petroleum products in February 2023 and was recorded at $1.26 billion against $1.25 billion in Feb 2022. Its imports declined by 4.6 percent over the previous month’s (January) imports of $1.33 billion.

Over February 2022, crude oil imports in February 2023 increased by 5.9 percent to $383.1 million, LNG by 15.3 percent to $358.3 million and LPG imports up by 7.5 percent to $60.8 million, however, petroleum products’ imports declined by 11.6 percent to $462.7 million.

As compared to the previous month, the petroleum products import during the month under review were down 32.7 percent and LPG by 14.87 percent, while LNG imports increased by 47.6 percent and crude imports by 18.1 percent over the previous month.

In July-Feb 2022/23, the petroleum group’s total imports were reduced by 8.3 percent to $11.88 billion over the same period of last year’s imports of $12.95 billion.

During the eight months, petroleum products imports declined by 14.47 percent to $5.35 billion and LNG by 17.2 percent to $2.55 billion, while crude oil imports increased by 10.32 percent to $3.48 billion and LPG imports up by 8.2 percent to $489.4 million.

Machinery imports also decreased 55.5 percent year on year in February 2023 to $421.4 million—the lowest imports since March 2013 or a decade low. In the same month of last year, the economy had spent $946.4 million on its imports.

In the previous month (January), its imports were of $499 million.

Over February 2022, textiles machinery imports in February 2023 reduced by 83.8 percent to $11.93 million, power generation machinery by 58.8 percent to $39.1 million, electrical machinery by 17.2 percent to $128.6 million, agriculture machinery by 73.9 percent to $3.1 million, construction and mining machinery 37 percent to $9.5 million and telecom machinery imports also declined 70.2 percent to $64.7 million. Mobile sets imports were reduced by 76.7 percent to $33.1 million, however, over the previous month, its imports increased by 12.6 percent.

Interestingly, on the imports of transportation products’ including cars and vehicles, and parts, the economy spent $137 million in February 2023, however, it was 54.5 percent less than last year’s imports of $301.5 million. In eight months, its total imports were $1.44 billion, 51 percent less than last year’s imports of $2.94 billion.

Road motor vehicles (build units, CKD/SKD), $121.8 million were spent during the month. Last year in the same month, the spending on these vehicles was $275.5 million, showing a reduction of 55.8 percent.

Under the completely built units (CBU) during Februar2023 imports of buses, trucks and other heavy vehicles imports were $5.78 million. Of this, interestingly motor cars’ imports stood at $3.9 million.

Under the CKD/SKD, imports of buses, trucks, and other heavy vehicles imports were $92.3 million, while motor car imports were recorded at $69.7 million.

Motorcycle imports also stood at $2.01 million. Besides, the parts and accessories imports stood at $22.7 million. Similarly, $14.92 million were spent on the import of aircraft, ships, and boats.