Lahore - The textile exports declined by 5 percent to $1.02 billion, whereas the value added shipments declined by 9 percent to $597 million in Feb 2016.

However, the basic segment witnessed a 3 percent uptick to $293 million.

Within the value added segment, the dollar amount netted by Knitwear and Readymade Garment fell by 16 percent and 10 percent MoM, respectively. Although average realised prices remained stable around Dec 2015, volumes slipped by 16 percent and 11 percent for Knitwear and Readymade Garments, respectively, as the winter demand spike tapered off.

Basic textiles inched up by 3 percent MoM, as Yarn exports recovered 20 percent MoM to $106m (off-take improved 22 percent, while the average prices dipped by 2 percent). However, on a YoY basis, yarn exports plunged by 38 percent during Feb 2016. Local supply-side factors coupled with international demand-side factors took a toll on textile exports.

Shrinking Pakistan’s cotton harvest (down 34 percent YoY) and Chinese manufacturing slowdown along with EU-side turmoil has also affected the textile exports. Furthermore, disproportional PKR/USD depreciation versus regional currencies has also made our textile products less competitive.

Recent approval of STPF (2015-18), reduction in industrial electricity tariff, commencement of LNG import, and zero rating of textile exports along with further rupees depreciation would bode well for the industry, as the incumbent government seems focused on improving Pakistan’s exports and domestic manufacturing.