Pakistan’s textile sector witnessed robust exports that reached $19.3 billion in the financial year 2021-22, showing a 26% surge over the previous year, according to the Pakistan Bureau of Statistics (PBS).
In June alone, the exports were up 3% year-on-year, according to the Pakistan Bureau of Statistics (PBS).
Exports grew owing to increased volumetric growth of 16% YoY in the value-added segment, steep rise in global demand and record high cotton prices, said Topline Research textile analyst Saad Ziker. In terms of value, they reached Rs3.4 trillion, up 40% YoY.
The textile sector plays an important role in Pakistan’s economy, accounting for around 60% of the country’s total exports. However, a slowdown in textile demand is expected shortly as inflationary pressures increase in major export destinations, such as the United States and European countries. This may worsen the trade imbalance for Pakistan, posing a challenge for the country’s economy.
The knitwear segment continued to be the top performer in the value-added category, posting 34% year-on-year growth in exports to $5.1 billion in the financial year 2022, due to a sharp rise in global demand, Ziker said.
Other value-added segments such as ready-made garments, bed wear and towel posted year-on-year growth of 29%, 19% and 19% to $3.9 billion, $3.3 billion and $1.1 billion respectively.
Despite the global economic crisis, the textile sector is posting export growth and earning foreign exchange for the country, said textile analyst Arsalan Hanif.
Although the textile sector is currently experiencing export growth, this is not expected to continue due to rising production costs. These increased costs are a result of factors such as the recent rise in energy costs and electricity load-shedding. This lack of reliable energy sources has led to companies being unable to meet export commitments, ultimately resulting in a decline in export orders.
Interestingly, Pakistan’s textile exports remained four times high compared to imports in FY22. Textile exports reached $19.3 billion in FY22, whereas imports of the commodity stood at $4.8 billion, including imports of raw cotton, fibre, worn clothing, etc.
As compared to last month, Pakistan textile exports registered 4% MoM growth in Jun-22 led by a 4% MoM increase in volumetric growth. The main driver for this growth was the Eid holidays in May 2022, which led to increased demand for Pakistan textile products. Value-added products, especially ready-made garments, recorded a 15% MoM increase. Knitwear exports also grew by 11% MoM, with a 28% increase in volumetric growth.
In Jun-22, all items in basic textiles witnessed a negative MoM and YoY change to $301 million, down 13% MoM and 9% YoY.
In comparison with June 2021, Pakistan textile exports are up by 3% YoY, a higher 35% YoY in Pakistan in terms of the Pakistani rupee in June 2022.