ARTICLE: As the world severely got hit by the COVID-19 pandemic, the economies all around the world nearly collapsed, while Pakistan's economy which was already in its recovery phase sank again. The pandemic induced lockdown throughout the country brought all the economic activities to a halt and the country suffered greatly. But eventually due to the constant efforts of the Government and their enforcements, the country was able to get back on track, showing clear signs of recovery.
Once the rising pandemic was controlled, Government started cautiously resuming the economic activity in the country, along with providing relief packages to the businesses to provide support and boost their morale in order to get the economic wheel going again. To support exporters in these challenging times and to prevent liquidity problems, SBP announced several measures including refinance scheme to support employment and prevent layoff of workers and relaxing credit requirements for exporters. In April-2020 the exports showed a downwards trend of 54% as compared to April-2019. But after the month of April, the efforts made by the Government to encourage the export sector started paying off and the signs of recovery could be seen in the month of May-20 which only saw 33% decline in the exports. Same momentum continued in June-20 as well, as the downwards trend had been brought down to a single digit figure of 6%. In July-20, textile exports revived by increasing 14.4 per cent year-on-year to US$ 1.272 billion compared to US$ 1.112 bn in the corresponding month of last year.
Textile & Clothing had the largest share among all export commodities with an average 57% market share over the 6-month period followed by Agro-Food goods with a market share of 22%. Textile & Clothing remained the largest export commodity with a market share of 60% in June, 2020 followed by Agro-Food and Engineering & Manufacturing goods which held market share of 19% and 8% respectively.
Revival of Textile Exports:
The total value of textile exports increased from US $ 404 million in May to US $ 959 million in June; growing by 21%. Despite the robust recovery of Textile & Clothing goods; there is still significant room to further grow the trade value of Pakistani exports in this category in the second half of 2020.
In Textile group; Knitwear remained the top export commodity with a CAGR of 2.0% followed by Readymade garments, Bedwear, Cotton Cloth and Cotton Yarn in descending order by their trade value with respective CAGR rates of -7.2%, -3.1%, -5.9% and -5.1% respectively.
Following an Identical trend - the all others category constituted 27% of Pakistan's total textile exports in the month of June followed by Knitwear and Readymade garments having 23% and 19% in share of exports respectively.
Along with the positive trend, the export figures also projected that the strategies of the geographical and the product diversification were also turning out to be fruitful, since there was significant growth seen in the exports. The overall textile sector and value-added products have shown improvement while, at the same time, the export of cotton yarn and fabric has gone down, but as a result of overall progress, the trade balance has improved by US$ 8.7 Billion, which shows that the Current Account Deficit is also at manageable levels.
In terms of export strategy, greater emphasis has been on product diversification. Government is still being optimistic towards achieving the export targets in the new fiscal year and the policy of product and geographical diversification will continue to be actively pursued for success in this regard. We are confident that the growth momentum will remain continue and country & exports will scale new heights.
Copyright Business Recorder, 2020
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