Exports growth starts showing recovery
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ISLAMABAD: In line with world trade, Pakistan’s exports bounced back after a sharp hit during strict lockdown in the last fiscal year mainly due to export-oriented government policies and strong economic recoveries in the main export markets.
And the surge in imports may be attributed to the rising demand for intermediate goods with the resumption of economic activities, according to Economic Survey 2020-21 released on Thursday.
Export growth is hindered owing to lack of diversification in export goods. The trend of Pakistan’s exports of major items has remained more or less the same with concentration on three items viz cotton manufactures, leather and rice.
These three categories accounted for 70.5pc of total exports during July-March FY21. Within these three items, cotton manufactures remain the major contributor with 58.8pc in total exports. Thus, Pakistan’s exports are still concentrated in a few items.
Exports were targeted at $22.7bn for the FY21. Exports during July-March FY21 amounted to $18.7bn as compared to $17.4bn in the same period last year, which shows a growth of 7.1pc as compared to the 2.2pc in the same period last year.
Higher textile exports came on the back of quantum growth in high value-added products, particularly knitwear, home-textiles (bedwear and towels) and made-up articles. At the same time raw cotton, cotton yarn and cotton cloth showed a declining trend. This indicates countries preferences shifting from raw and intermediate goods to value-added exports.
The textile sector also benefited from Export Financing Scheme (EFS) and out of Rs68.7bn EFS loan, Rs44.8bn has been given to textile sector during July-March FY21. This significantly helped to improve the liquidity conditions and enhanced the capacity utilisation of the sector. Meanwhile, declining share of China in the US apparel market and shifting focus from apparel to global textile market provided some room to Pakistan and other competitors to enhance their shares in apparel exports.
The contraction in export of rice was mainly driven by higher prices due to unavailability of shipment containers which raised the average cost of shipping.
Published in Dawn, June 11th, 2021
