As per the latest data available, Pakistan’s textile exports in December 2011 were recorded at $944.27 million, down 19.2 per cent YoY. However, the same was up 15.3 per cent on a MoM basis as cotton cloth, knitwear and bed wear depicted growths of 22-59 per cent in monetary terms.
Cumulative textile exports in 1HFY12 were recorded lower by 4.7per cent YoY at $5.96 billion which was mainly on account of lower cotton prices and lower export volumes of cotton yarn and raw cotton. Although exports are likely to remain subdued compared to last year, recent uptick in cotton prices and better than expected cotton crop production is likely to provide a stimulus to textile exports in 2HFY12. Nevertheless, the energy crisis in the country poses a great risk to meeting export orders by textile manufacturers.
Textile exports down 4.7 per cent in 1HFY12: During the first six months textile exports were recorded at $5.96 billion, down 4.7 per cent YoY. While the exports grew on a monthly basis, lower cotton prices along with enhanced energy crisis in the country were major reasons for the fall in cumulative exports in 1HFY12. Furthermore, slowdown in the European economies amid the recent debt crisis also put pressure on the export orders. All major categories witnessed a double digit decline in export quantities. Going forward, we believe the materialisation of the GSP plus status (expected to be finalised by end of February – with Bangladesh now lifting the objection) can aid textile exports in the future, said Bilal Qamar at JS.
Cotton prices outlook: International cotton prices after diving below a $1 per lbs mark have recovered again and currently hover around $1.03 per lbs. Similarly, prices in the domestic market have also witnessed an uptick currently at Rs5,800 (up 18 per cent since hitting a low of Rs4,900 in FY12). We believe the recovery in the international cotton prices is likely to bode well for the textile segment going forward, he added.
Cotton arrival to reach 13.5-14mn bales in FY12: Surprisingly, cotton arrivals till January 15, 2012 have surpassed 12.5 million bales (initial government target) to reach 12.8 million bales. Interestingly, the fortnightly flow came in at 797k bales, which was higher by 53 per cent on a YoY basis. Though, fortnightly flows from here on are likely to slow down, we expect the country to record arrivals of 13.5-14.0 million bales in FY12, he added.
