Pakistan's Textile Exports Show Promising Growth in May 2023

By Omed Hajjana

Pakistan’s textile industry experienced a notable upswing in May 2023, as textile exports surged by 7% month-on-month (MoM) to reach a value of US$1.32 billion.

This positive development comes as a relief to the industry, which has faced challenges amid ongoing global economic uncertainties.

In terms of Pakistani Rupees (PKR), the exports amounted to an impressive Rs377 billion, indicating a parallel 7% MoM increase.

The encouraging figures reflect a rebound in the country’s textile sector and provide a glimmer of hope for future growth.

Notably, value-added textile exports recorded a steady growth of 3% MoM, totaling US$889 million.

Among the value-added subcategories, towels, ready-made garments, and knitwear showcased significant increases of 10%, 8%, and 3% MoM, respectively.

However, bedwear experienced an 8% MoM decline.

Basic textiles exhibited remarkable performance in May, with a substantial 31% MoM increase.

This growth was primarily driven by a 19% MoM surge in cotton cloth exports. The rise in demand for basic textile products, including yarn and cloth, can be attributed to improved orders from key markets such as China and Bangladesh.

In terms of volume, May witnessed positive trends as well. Readymade garments and towels saw volume increases of 8% and 5% MoM, respectively.

Cotton yarn and cotton cloth also experienced notable growth, with volume increases of 64% and 22% MoM, respectively.

While the MoM figures paint an optimistic picture, a year-on-year (YoY) analysis reveals a 20% decline in Pakistan’s textile exports compared to May 2022.

This dip is primarily due to a 21% YoY drop in the value-added segment and a 19% YoY decrease in the basic segment.

Within the value-added segment, bedwear, knitwear, ready-made garments, and towels suffered YoY decreases of 28%, 22%, 17%, and 5%, respectively.

These declines reflect the challenges faced by the industry in a volatile global market.

Looking at the fiscal year 2023 as a whole, textile exports for the 11-month period (11MFY23) amounted to US$15.03 billion, marking a 15% YoY decline.

However, when measured in PKR terms, the decline was limited to 18% YoY. Both the basic and value-added segments experienced setbacks, with declines of 22% and 13% YoY, respectively.

Despite the overall decline, there were pockets of growth within the 11MFY23 period. Readymade garments and knitwear witnessed impressive volume increases of 46% and 9% YoY, respectively.

Analysts attribute this growth to the positive impact of PKR devaluation on these labor-intensive segments.

Looking ahead, it is projected that textile exports for the entire fiscal year 2023 will range between US$16 billion and US$16.5 billion, representing a decline of approximately 16% compared to the previous fiscal year. Pakistan Textile: Exports up 6% in August 2022

The anticipated decrease can be attributed to subdued global demand and a significant 25% drop in international cotton prices throughout FY23.

The recent growth in Pakistan’s textile exports, despite the challenging global landscape, instills confidence in the resilience of the industry, Topline Research said.

With renewed efforts to explore new markets and enhance competitiveness, the sector aims to overcome the obstacles and foster sustainable growth in the coming months.