Pakistan textile sector shown robust performance during 9MFY22

As per data released by Pakistan Bureau of Statistics (PBS), textile exports for the month of Mar’22 clocked-in at USD 1.6Bn as compared to USD 1.4Bn in the SPLY (↑20% YoY) and USD 1.7Bn in Feb’22 (↓3% MoM). Cumulatively, this equates to exports of USD 14.2Bn in 9MFY22 against USD 11.4Bn in the SPLY, registering robust growth of 25% YoY. During the month, value-added exports clocked-in at USD 1.1Bn (↑28% YoY) while basic textiles exports were recorded at USD 309Mn (↑2% YoY).

Value-added segment pulling the strings: During the outgoing month, value-added exports clocked-in at USD 1.1Bn (↑28% YoY) despite volumetric decline of merely 0.5% on a YoY basis. In 9MFY22, total value-added exports have clocked-in at USD 9.9Bn (↑26% YoY) despite only 7% YoY volumetric growth on the back of ongoing commodity super cycle that resulted in record cotton prices and hefty PKR depreciation (↓16.2% in 9MFY22). Key contributions to the segment came from Knitwear (9MFY22: USD 3.7Bn, ↑34% YoY), Bedwear (9MFY22: USD 2.4Bn, ↑19% YoY), Towels (9MFY22: USD 819Mn, ↑18% YoY) and Readymade Garments (9MFY22: USD 2.9Bn, ↑26% YoY).

Basic textiles continue to remain laggards: In 9MFY22, basic textiles have contributed USD 2.8Bn to total exports against USD 2.2Bn in the SPLY (↑27% YoY). On the volume front, the segment has remained sluggish as demand for value-added products has been on the rise while that of basic textiles have declined by ~51% in 9MFY22. The decline is also attributed to the fact that demand for raw cotton and cotton cloth have increased locally due to which the industry has not been able to tap the export markets. Moreover, lower cotton yield has also affected cotton exports from the country. Though volumes have declined, the segment has shown robust growth of 27% YoY on the back of high cotton prices which have increased by ~60% over the past year. Notable contributions from the segment have come from Cotton Yarn (9MFY22: USD 908Mn, ↑26% MoM) and Cotton Cloth (9MFY22: USD 1.8Bn, ↑26% YoY).


Being the primary source of export based revenue, textile sector continues to hold utmost importance in the country. With multiple incentives on offer by the govt. through favorable policies, the sector has shown robust performance during 9MFY22 and is on track to close the year with highest ever textile exports. Moreover, with upcoming capacity expansions on the back of TERF/LTFF/EFS and new export markets being tapped, the sector is poised for further growth in the coming years. We have a favorable stance on the sector with our top picks being NML, ILP and GATM.

Courtesy – BMA Capital Management Ltd.

Posted in Textile Industry.

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