Textile exports increase to $2.26 billion in two months

KARACHI: Textile exports marginally rose four percent to $2.26 billion in the first two months of the current fiscal year of 2018/19 as value-added sector recorded increase in export revenue during the period with knitwear witnessing double-digit growth, official data showed on Wednesday.

Pakistan Bureau of Statistics (PBS) data showed that textile exports amounted to $2.18 billion in the corresponding period a year earlier.

Knitwear exports surged 11.3 percent to $488.82 million in the first two months. Exports of bedwear increased 2.7 percent to $394.98 million. Towel exports rose 7 percent to $125.2 million. Exports of readymade garments increased 4.1 percent to $435.4 million in the first two months of the current fiscal year.

Knitwear garment exporter Jawed Bilwani said the growth stemmed from orders shifted from Bangladesh where workers rumbled on low wages.

Textile workers lodged protests against new wage announcement by the government and warned go-slows threatening the industry that fetched $30 billion in exports revenue, accounting for 83 percent of the country’s total exports in 2017/18.

“We are currently receiving spillovers,” Bilwani said. “Actual orders are still not coming.”

Bilwani said government’s decision to exempt export-oriented sector from a recent gas tariff hike would give some respite.

The government announced up to 143 percent increase in gas tariffs in a move to reduce outstanding receivables of state-run Sui Southern Gas Company and Sui Northern Gas Pipelines Limited, which swelled to Rs152 billion.

Textile exports surged 26 percent month-on-month and increased 7.3 percent year-on-year to $1.26 billion in August.

Bilwani, who is also chief coordinator of Pakistan Hosiery Manufacturers and Exporters Association, said the cost of production in the country is high. Industrialists in Karachi receive water at two dollar/gallon compared to 35 cents/gallon in other parts of the country.

The new government expressed readiness to resolve critical issues, including stuck refunds, facing the industry.

“If this happens exports would further increase,” Bilwani said. “Textile industry has potential to earn $25 billion in annual revenue.”

Analyst Mirat Hyder at brokerage Taurus Securities said surge in exports is a promising early sign of the country’s external sector benefitting from its devalued currency.

“Since August 2017, the US dollar has appreciated 17.55 percent,” Hyder added.

PBS data further showed that total exports increased 5.1 percent in the July-August period.

Food exports soared 10.6 percent to $568.5 million during the two months period. Of the total, rice exports amounted to $223.9 million, almost flat compared to corresponding months a year earlier. Sugar exports soared 58 percent to $51.1 million in the July-August period.

In July-August, imports stood at $9.83 billion, slightly up compared to $9.73 billion in the corresponding period a year ago.

Oil imports rose 30.1 percent to $2.64 billion in the first two months of the current fiscal year. The second biggest import bill was of machinery, which stood at $1.59 billion, down 19 percent year-on-year in the period under review.

“In the long run, we can see that strengthening Brent corresponds with a weakening rupee, which predictably erodes a negative balance of trade as exports become competitive and imports become expensive,” Hyder said. “In the short run, we can see that a weakening Brent can relieve some of the pressures of our import bill.”