KARACHI: According to the most recent data released by PBS (Pakistan Bureau of Statistics), the textile exports sector faced a significant decline of approximately 11% year-on-year (YoY) in July 2023, amounting to $1.3 billion compared to the $1.5 billion recorded during the same period in the previous year.
This downturn can be largely attributed to the global economic recession, leading to a decrease in export orders, coupled with challenges within the domestic environment, according to Insight Securities.
Breaking down the segments, the exports of value-added textile products, including Knitwear, Bedwear, Towels, and Readymade garments, witnessed a decline of about 13% YoY, amounting to $929 million in July 2023. Similarly, basic textile exports, encompassing Raw Cotton, Cotton Yarn, and Cotton Cloth, decreased by approximately 6% YoY, settling at $242 million. Additionally, other textile exports also saw a decline of about 9% YoY, reaching $141 million during the same period.
However, in terms of volume, overall textile exports exhibited a 15% YoY increase in July 2023 compared to the same period in the preceding year. This growth was primarily driven by a substantial increase of around 33% in basic textile exports. Value-added and other textile segments also experienced volume growth, rising by 4% and 15%, respectively. On a month-on-month (MoM) basis, export volumes saw an 11% decline.
In July 2023, value-added textile exports encountered a volumetric decline of 9% MoM, accompanied by a price decrease of approximately 1%. Consequently, there was an overall MoM decrease of 11% in value-added exports, amounting to $929 million. The decline in value-added exports was primarily driven by readymade garments, which observed a remarkable 114% MoM decrease. Similarly, Knitwear and Bedwear experienced declines of 7% and 10% MoM, respectively.
Basic textile exports faced a 12% MoM decline in July 2023, with a volume decrease of 11% and a price decrease of 0.5%. This resulted in total exports of $242 million, compared to $258 million in May 2023. The decrease in basic textile exports was primarily attributed to a 13% decline in cotton cloth exports, mainly due to a decrease in volume. Additionally, cotton yarn exports decreased by approximately 9% MoM.
The textile exports sector has grappled with multiple challenges stemming from both the domestic environment and weak global demand. While there is an expectation for an increase in textile exports in volumetric terms due to a resurgence of demand in export regions, this potential growth might be offset by declining product prices. The sector continues to face hurdles in the domestic economy, including elevated gas and electricity tariffs, delays in input clearance, and higher finance rates. Nevertheless, the prospect of promising cotton production in the upcoming year offers some relief to local textile manufacturers.