Textile exports inch down in July

KARACHI: Textile exports clocked in at $1.002 billion for July, down 0.49 percent year-on-year and 16.09 percent month-on-month, official data showed on Monday.

Pakistan Bureau of Statistics (PBS) data showed that textile exports amounted to $1.006 billion in July last year and $1.194 billion in June. Exporters said exports to several destinations around the world declined in the past because of rising cost of doing business. An exporter said the country’s exports were largely dependent on imported raw materials, and depreciated local currency increased their cost of production leaving the goods uncompetitive in the international market.

In July, cotton yarn exports increased 7.62 percent year-on-year to $117.343 million. Knitwear exports rose 7.78 percent to $208.88 million. Bed wear exports declined 3.56 percent to $164.76 million. Readymade garments exports fell 0.46 percent to $211.21 million while cotton cloth fetched $144.6 million in July, down 9.94 percent over the same month a year earlier.

Analysts said while textile exports could receive a major stimulus from recent rounds of rupee depreciation, structural concerns might reduce the potential gains that exporters could realise from a weaker local currency.

“First is the issue of local cotton availability and our channel checks suggested that the sowing target for the FY2019 has been missed by a significant margin, which creates doubts over achievement of national cotton production target of 14.37 million bales,” Ahmed Lakhani, an analyst at JS Global capital said.

The other option for spinners is to look to international markets for cotton procurement. “However, the re-imposition of duties and sales tax of a cumulative 11 percent on imported cotton from July 15 plus rupee depreciation against US dollar will largely nullify any potential benefits of importing cotton from overseas in our view,” Lakhani said.

Furthermore, the perennial issues plaguing the sector remain largely unaddressed. Lack of availability of system gas and costlier regasified liquefied natural gas have forced several smaller mills to close operations.