Exports hit decade high of $2.3 billion in March

ISLAMABAD: Pakistan’s exports in March reached a decade-high of $2.3 billion with monthly figures showing growth year-on-year and over the previous month, commerce adviser said on Thursday.

“Ministry of commerce is glad to share that according to provisional figures, in March 2021 our exports increased to $2.345 billion. This is an increase of 13.4 percent over February 2021. It is the monthly highest in last 10 years,” Adviser to Prime Minister for Commerce and Investment Razak Dawood wrote on Twitter.

“This is also the first time since 2011 that exports have crossed the $2 billion mark for six consecutive months.”

However, commerce adviser termed the annual growth as misleading because the last year’s lockdown kept the industrial wheel extremely slow.

“The export growth of 29.3 percent over March 2020 should not be considered as it is misleading since there was a lockdown last year,” Dawood said.

For the 9-month period of July-March of the current fiscal year, exports increased 7 percent to $18.6 billion as compared to $17.4 billion in the corresponding period last year, according to the ministry of commerce’s data.

Exports are expected to get an upset due to shortage of cotton, the main industrial input of textile industry that accounts for more than 60 percent of total exports.

The government is uncertain about giving a go-ahead to cotton and yarn import from India, the world’s largest cotton producer. Analysts said textile industry’s growth is tied with cotton import from India to keep up momentum of textile exports from the country.

“It’s extremely important as there is significant shortfall in cotton production this year. Lack of cotton will result in reduced textile output and hence exports,” Saad Hashemy, an executive of Karachi-based BMA Capital said.

Although some analysts said banning Indian cotton would not deprive Pakistan’s textile industry of the raw material, they still believe cross-border trade is more cost-effective.

“Eventually we will be importing from China and Europe as we are doing it right now,” said Tahir Abbas, head of Research at Arif Habib Limited.

However, there are two differences when it comes to cost-effectiveness of Chinese and European cotton, Abbas said. One is transportation time and cost involved in importing cotton from neighbouring India vis-à-vis international import. Secondly, there is four to five percent difference in cotton prices.

In July-March period, imports grew 12 percent to $39.2 billion compared to $34.8 billion during the corresponding period last year. The growth has come from increase in import of raw material as well as import of wheat, sugar and cotton, commerce adviser said.