Karachi, December 21, 2022 (PPI-OT): Pakistan Textile: Nov’22 Textile Exports grow 4.7%MoM on low base

PBS data has shown Textile exports clocking in at US$1.4bn in Nov’22, higher by 4.7%MoM due to the low-base from the earlier month. When compared to the 4MFY23 period, the exports in Nov’22 fell short by ~4.3%. On a cumulative basis, 5MFY23 exports have clocked in at US$7.4bn, lower by 5.1%YoY.

Value-added textiles spearheaded the sequential growth, increasing by 7.6%MoM, which offset the 10%MoM dip witnessed by the non-value added segment.

The data indicates that exporters have had to offer lower prices in a bid to increase volumes. For instance, average prices of Knitwear products were down by 2%MoM and 4% lower than the 4MFY23 average realized price.

Inflationary pressures in the developed world and the resulting dip in disposable income has led to muted demand from the textile sector. We expect the challenges to continue over the course of the fiscal year and lead to a 10-15% export contraction in the sector.

To note, inventories have been built up by large retailers in UK, US and Europe, which are expected to deplete over the course of the ongoing holiday season. As a result, the exports may see a temporary blip as retailers look to replenish inventories. However, we view this to be a short-lived phenomenon.