The country’s total exports stood at $15.9 billion in 8MFY13 compared to $15.1 billion last year. The textile exports being a major contributor to the total exports of the country, the sector contributed 53% amounting to 8.5 billion in dollar terms. The exports of the sector posted a growth of 6.55% during 8MFY13.
“Within textile sector, major contribution came from exports of cotton yarn, increasing by 31.3%YoY to $ 1,438 million fuelled by increased demand from China,” said InvestCap analyst Abdul Azeem. Similarly, the cotton cloth, registered 11.8%YoY growth in dollar terms, he added.
The exports from the latter increased to $ 1,717 million in 8MFY13 despite the decline of 4.6% in the quantity of cotton cloth. Moreover, the readymade garments and knitwear segment surged by 8.76%YoY to $ 1,168 million and 2.3%YoY to $ 1362 million respectively. The main reason behind this growth was an upsurge of demand from the US and European countries.
“We estimate textile exports to be $ 13 billion for FY13 as against the target of $ 16 billion, the latter can be attributed to the shortage of electricity and the uncertain law and order situation,” the analyst said.
Nevertheless, he said, textile exports expected to post an increase of 5% in FY13 over last year, the local textile sector, being export oriented is expected to benefit from such an increase. “Our textile universe, consisting of Nishat Mills (NML) and Nishat Chunian (NCL) is expected to register an expansion of 41% in its bottomline,” Azeem said. The overall imports declined by 2.4%YoY to $ 29.07 billion in 8MFY13. The major importing group was the petroleum group, comprising of 34% of total imports. Whereas Petroleum imports declined by a minimal 2.1%YoY to $ 9.79 billion during 8MFY13, imports of petroleum products dropped by 4.2%YoY to 6.2 billion amid 6.3%YoY fall of quantity imported to 8.7 million MT.
However, petroleum crude import recorded an increase, both in dollar terms and quantity, rising by 3.8%YoY (to $ 3.6 billion) and 10.2%YoY (to 4.58 million MT). Such a trend was led by an increasing utilization of local refineries capacity due to an increasing crude oil demand in the country. During 8MFY13, the per barrel cost of crude oil (Arab light) was down by 0.7%YoY.
“With our expectations of crude oil prices to remain near $ 110, any upsurge in the import of the commodity is expected to be on the back of unavailability of gas which could further widen the trade gap,” said the analyst.
Going forward, the analyst said, improved performance on the export front due to rupee depreciation against the dollar, which is anticipated to reach 9% YoY by year end, thus making local exports cheaper.
Moreover, resumption of textile exports to EU on concessionary tariff along with exports of yarn and grey cloth to China were both expected to fare well for local textile exports.
Trade balance at mercy of textile exports
