Pakistan’s textile exports surge 6% in December amid global shifts

KARACHI: According to provisional data from the All Pakistan Textile Mills Association (APTMA), Pakistan’s textile exports increased by 6% in December compared to the same month last year, reported nukta.com.

This growth brought textile exports to $9.09 billion in the first half of the fiscal year 2024-25 (FY25), representing a 10 percent rise from $8.29 billion during the same period last year. Overall, textile exports in 2024 reached $17.47 billion, up 6 percent from $16.07 billion in 2023.

Despite a decline in global demand for textile products, countries like India, Pakistan, and Vietnam are expected to gain from orders that have shifted away from Bangladesh and China, particularly in value-added sectors such as knitwear, bedwear, and ready-made garments. Exports in these specific areas increased by about 20% year-on-year during the first five months of FY25.

However, the domestic spinning sector, which caters to local yarn supply or exports to China, is under strain. Yarn exports to China experienced a 39 percent drop compared to the previous year due to the influx of cheaper imported yarn and a decrease in local cotton supply.

To meet export demand, Pakistan is anticipated to import five million bales of raw cotton, costing around $2 billion, as opposed to the 1.2 million bales worth $0.45 billion imported in FY24.

Analysts suggest that if the current 10 percent export growth rate persists in the upcoming months of FY25, the increase in cotton imports is likely to lessen the net impact on the textile sector’s trade balance.

Looking ahead, demand for value-added products is expected to rise as global importers seek to diversify their orders away from Bangladesh and China. Additionally, ongoing monetary easing is likely to enhance the sector’s profitability despite ongoing challenges such as elevated export taxes, accumulating government receivables, and reduced profit margins due to rising energy costs. Concerns remain regarding possible reductions in gas supply for captive power plants, although some relief may be provided through backup fuel and power solutions, including the conversion to coal by certain producers.