Textile exports drop 7pc y/y to $1.3 billion in November amid gas price hike

KARACHI: Textile exports dropped 8 percent month-on-month and 7 percent year-on-year in November, as a surge in gas prices hurt the competitiveness of the sector, official data showed on Thursday.

Textile exports, which account for more than half of the country's total exports, amounted to $1.3 billion in November, down from $1.4 billion in October and $1.4 billion in November 2022, according to the Pakistan Bureau of Statistics (PBS).

In rupee terms, textile exports fell 7 percent month-on-month to Rs376 billion, but rose 19 percent year-on-year, mainly due to the depreciation of the currency against the dollar. The decline in textile exports was mainly driven by a fall in value-added products, such as towels, knitwear, bedwear and readymade garments, which collectively dropped 6 percent month-on-month and 12 percent year-on-year to $920 million.

Basic textiles, such as cotton yarn, cotton cloth and raw cotton, also witnessed a 14 percent month-on-month fall to $243 million, but increased 20 percent year-on-year, largely due to a 12-fold jump in raw cotton exports.

Analysts attributed the fall in textile exports to the recent increase in gas prices, which has raised the cost of production and made it difficult for exporters to compete in the international market.

The government has set a textile export target of $25 billion for the current fiscal year ending in June 2024, but the industry says it is unlikely to achieve it due to the gas price issue and the global economic slowdown.

"We expect textile exports to reach $17 billion in FY24, up 3 percent year-on-year, but far below the target," an analyst at brokerage Topline Securties said.

Meanwhile, the country's trade deficit narrowed 10 percent month-on-month and 29 percent year-on-year in November, as imports fell more than exports, revised trade date showed.

The trade deficit stood at $1.966 billion in November, compared to $2.174 billion in October and $2.77 billion in November 2022.

Exports fell 4.35% month-on-month and 0.5 percent year-on-year to $2.573 billion in November, while imports dropped 6.68 percent month-on-month and 14.5 percent year-on-year to $4.539 billion.

The main commodities of exports in November were knitwear, rice, readymade garments, bedwear and cotton cloth, while the main commodities of imports were petroleum crude, petroleum products, liquefied natural gas, palm oil and iron and steel.