Pakistan Textile exports for Sep-22 were recorded at US$1.5bn, down 3% MoM. In volumetric terms, exports remained strong with Cotton Cloth, Bedwear and Towels increasing MoM. In PKR terms, exports clocked in at Rs352bn almost flat MoM.

As compared to Sep-21, Pakistan textile exports were up 3% YoY (+41% YoY in PKR terms) due to growth in value added segment.

Value-added textile exports declined by 4% MoM to US$1.0bn due to Ready-made segment exports decreasing by 16% MoM and Knitwear by 3% MoM. However, Bedwear and Towels showed an improvement increasing by 4% and 16% MoM respectively.

On YoY basis, Value-Added segment increased by 5% mainly due to increase in Knitwear and Towels by 12% and 8% YoY respectively.

Basic textiles also witnessed a decline of 3% MoM and 2% YoY to US$283mn in Sep-22.

During 1QFY23, Pakistan recorded highest ever textile exports of US$4.58bn up 4% YoY (+41% YoY in PKR terms). Our channel checks suggest that textile orders are uncertain after the 2QFY23 due to global slowdown and some spinning units are currently non-operational in response.

Moving forward, slowdown in global economy remain a key challenge facing the sector. Besides this, recently destroyed cotton crop due to floods will also be a challenge for the industry.

To note, Government was mulling the discontinuation of concessional electricity tariff given to export oriented sectors from October 01, 2022 and there were news reports of textile players shutting down mills. However, the issue has since been resolved with tariff fixed at Rs19.99 per unit for Fiscal Year 2022-23.

Courtesy – Topline Securities