Expensive gas hits textile exports – Business

KARACHI: High gas prices appeared to have made textile exports uncompetitive on the world market resulting in an eight per cent month-on-month and 7pc year-on-year decline to $1.3 billion in November.

In rupee terms, the country’s textile exports clocked in at Rs376bn, down by 7pc month-on-month but rose 19pc year-on-year owing to rupee depreciation against the dollar, said a note by Topline Securities on Thursday.

Basic textiles witnessed a fall of 14pc MoM and a rise of 20pc YoY to $243m in November.

The YoY substantial increase resulted from the 12 times YoY increase in raw cotton exports due to the significant growth in cotton crop this year as compared to last year, which was greatly affected by floods.

Value-added textile exports reached $920m, up by 6pc MoM while it fell by 12pc YoY. Towels remained the major contributor to the segment with 21pc MoM and 20pc YoY drop in exports. Knitwear saw a 5pc MoM and a 12pc YoY decline.

Bedwear posted a 16pc MoM and 8pc YoY fall followed by 12pc YoY decline in readymade garments but a 5pc MoM rise.

In 5MFY24, textile exports shrank by 6pc to $6.9bn from $7.4bn in the same period last year due to an economic slowdown and a reduced demand for textile products worldwide.

The government has set a textile export target of $25bn. However, textile exports for FY24 will reach $17bn, up 3pc YoY.

IT exports rise 9pc in November

Pakistan’s Information Technology (IT) exports rose nine per cent month-on-month to $259 million in November, which was also higher than the 12-month average of $222m.

The jump is due to a relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), increasing it from 35pc to 50pc in the Exporters’ Specialised Foreign Currency Accounts, and the stable rupee which encourages IT companies to repatriate their foreign income and deposit it in local accounts.

IT export number indicates the amount remitted back to Pakistan by technology companies.

According to Caretaker IT Minister Umar Saif, IT companies have parked an estimated $1-2 billion outside of Pakistan.

Published in Dawn, December 22nd, 2023