That exports are increasingly being pinned as Pakistan’s way of averting a balance of payment crisis in the future, is rather well established. Having stuck in a limbo for quite some time, exports have finally started showing signs of improvement, which have been duly noted by the SBP, IMF and others who matter. The quality of exports growth has also arguably improved.
November 2019 saw the steady textile exports trend cementing further. In value terms, it may not be a huge leap, but the categorical breakups do offer a silver lining, and also some groundwork for the authorities and the sector players themselves, to work on – in the near and distant future.
Bear in mind that the global economic outlook is not the rosiest at the moment, and commodity prices are reflecting the sentient a fair deal. While you would normally expect more than a single digit increase in exports after a steep appreciation in dollar versus the rupee – it must be kept in mind that the nature of Pakistan’s major exporting items is highly competitive, and Pakistan is competing for a higher share in a global market that is facing a slowdown.
So the weight has to be carried by the volumes, as the prices part of the equation has been unfavourable owing to the global slowdown. And how well have some of the textile categories responded. It must not go without credit to the doers and the facilitators –but it also must not go without pausing for a moment and drawing lessons and chalking out plans from the past few months of textile export volume story.
Not that the country ahs all of a sudden started producing altogether a new breed of textile products – but it has only responded well to the support it was provided by the government. The fact that readymade garments are raking up record high volumes, month after month should not be lost on anyone. Interestingly, November 2019 saw the highest ever monthly volume and lowest ever monthly average price, for readymade garments. The shift has been made swiftly from the low margin cotton cloth, the share of which has gone down almost in tandem with the rise in readymade garments.
The 36 percent year-on-year jump in readymade garment export volumes in 5MFY20, despite a 16 percent drop in unit prices in the same period – has helped the category exports grow. The contribution from knitwear is also significant, which still holds the highest subcategory share with over 13 percent – as it saw single digit uptick in both volumes and price. The export story is building up nicely – and all involved must ensure t des not get derailed by unnecessary hurdles such as taxation or energy pricing issues.
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