ISLAMABAD: Textile and clothing exports shrank 9.49 per cent in the first two months of the current fiscal year from a year ago owing to rising cost of production and liquidity constraints, data released by the Pakistan Bureau of Statistics showed on Friday.
In absolute terms, the value of textile and clothing exports fell to $2.766 billion in July-August from $3.05bn in the corresponding months last year. The decline indicates no sign of revival in export proceeds in the first half of FY24.
Caretaker Commerce Minister Gohar Ijaz has claimed recently that the government will soon offer regionally competitive energy prices to textile exporters as well as resolve their cash flow issues by releasing pending sales tax refunds.
In FY23, the exports of textile and clothing contracted by 14.63pc year-on-year to $16.50bn. Pakistan’s total merchandise exports dipped by 12.71pc year-on-year to $27.54bn in FY23 from $31.78bn in the preceding fiscal year.
Petroleum imports dip amid demand slump
The PBS data showed the exports of readymade garments shrank 11.95pc in value in July-August but grew by 25.71pc in quantity, while knitwear dipped 13.42pc in value but grew 38.22pc in quantity, bedwear posted a negative growth of 8.44pc in value and but grew 2.72pc in quantity.
However, towel exports slightly increased by 6.52pc in value and 17.82pc in quantity, whereas those of cotton cloth dipped by 20.26pc in value and 12.14pc in quantity. The export of raw cotton declined by over 44pc during the months under review.
Among primary commodities, cotton yarn exports surged by 25.79pc, while yarn other than cotton declined by 13.68pc. The export of made-up articles — excluding towels — dipped by 2.20pc, and tents, canvas and tarpaulin by 1.52pc in July-August 2023 from a year ago.
The import of textile machinery declined by 74.63pc in July-Aug FY24 — a sign that expansion or modernisation projects were not a priority.
Furthermore, the import of raw cotton also dipped by 65.88pc in July-August FY24 from a year ago. However, the import of synthetic fibre was increased by 16.77pc followed by 109.92pc in synthetic silk yarn and 48.24pc in worn clothing.
Petroleum imports tumble
Imports of the petroleum group dipped 34.25 per cent year-on-year in July-August due to an economic slowdown that curtailed consumption amid unprecedented inflation.
At the same time, the local production and export of petroleum products also witnessed a declining trend. In absolute terms, the total import value of the petroleum group fell to $2.17bn in July-Aug from $3.30bn in the same months FY23.
The PBS data showed the imports of petroleum products declined by 41.44pc in value during July-Aug and 16.64pc in quantity. Import of crude oil decreased by 49.56pc in quantity while the value decreased by 38.49pc.
Similarly, liquefied natural gas (LNG) imports surged by 2.54pc during July-Aug FY24 on a year-on-year basis. On the other hand, liquefied petroleum gas (LPG) imports declined 10.43pc in the months under review.
Machinery imports plunged 12.43pc to $1.13 billion in July-Aug FY24 from $1.29bn in July-Aug FY23 mainly due to a decline in almost all categories of machinery excluding office machinery and mobile phones.
The import of mobile phones increased by over 76.19pc in July-Aug. Machinery imports of textile, power generating, agriculture and electrical appliances dipped.
The transport sector’s imports tumbled 33.52pc to $275.84m in July-Aug against $414.94m in the same months last year. The decline was seen in CBU (completely built-up units) as well as CKD because of lower local production of vehicles as the government has restricted the opening of letters of credit.
Published in Dawn, September 16th, 2023