Textile exports increase 9pc to $13.53bln in FY2018

KARACHI: Textile exports rose around nine percent to $13.53 billion for the fiscal year ended June 30 as financial incentives improved competitiveness of the key export-oriented sector, official data showed on Friday.

Pakistan Bureau of Statistics (PBS) data showed that textile exports amounted to $12.45 billion in the last fiscal year of 2016/17.

Analyst Ahmed Lakhani at JS Global Capital said growth in exports was mainly due to higher volumes sold during the last fiscal year. “We believe this indicates higher competitiveness of Pakistan’s textile exports amid a weakening local currency against major currencies,” Lakhani said.

Rupee lost around 20 percent against the US dollar since December last year. Last year, the previous government announced Rs180 billion of various tax concessions for export-oriented sector.

PBS data showed that knitwear exports increased 15.2 percent to $2.719 billion in the fiscal year of 2017/18. Exports of bedwear rose 5.8 percent to $2.3 billion. Readymade garments exports fetched $2.6 billion during the last fiscal year, up 11.22 percent year-over-year.

In June, textile sector’s exports clocked in at $1.194 billion, down 0.84 percent compared with $1.204 billion in May and falling 1.94 percent as compared to $1.217 billion exports in June.

Zubair Motiwala, chairman of the Council of All Pakistan Textile Associations said production was low in June due to Ramazan effect while several transactions were delayed due to Eid holidays.

“Going forward, we will be able to maintain the current export levels and might be able to register nominal gains,” Motiwala said. “However, unless government brings the cost of doing business down desired results would not be achieved.”

Motiwala further said the government should follow the Chinese model and reduce cost of utilities through concessions and subsidies.

Pakistan’s textile industry is the eighth largest manufacturer in Asia, contributing 8.5 percent to the country’s GDP, while employing about 45 percent of the total labor force – 38 percent of it being manufacturing workers.

An exporter said the country is only getting spillover orders and that too would stop coming once the competitors increase their capacity. The government should come with a concrete and sustainable policy to facilitate exporters.

“Due to weak global demand, the nation’s exporters were unable to boost margins significantly as a result of the depreciation of the local currency and had to pass on the benefits to their foreign customers,” Lakhani added.

In June, cotton yarn exports increased 13.4 percent year-over-year to $124.023 million. Knitwear exports were up 0.97 percent to clock in at $257.423 million, while bed wear exports declined 2.35 percent to $205.49 million in June. Readymade garments exports declined 2.94 percent to $235.68 million in June over the same month a year earlier, while cotton cloth fetched $188.26 million, up 7.6 percent.

Pakistan is the fourth largest producer of cotton with the third largest spinning capacity in Asia after China and India and contributes five percent to the global spinning capacity. At present, there are approximately 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units producing textiles.