The State Bank’s latest monthly data reveals that Pakistan’s exports to China in February fell to $152 million – the lowest monthly number in over three years. Meanwhile, imports from China have been surging month after month — crossing the $600 million mark for the first time in December 2014 and hitting an all-time high of $638 million in January 2015.
Total country’s exports to China were down by 20 percent year-over-year for the eight months ended FY15, while the overall exports for the period declined 3.5 percent year-over-year. Meanwhile, imports from China were up by 17 percent as against total imports remaining flat year-over-year. As a result of this Pakistan’s trade deficit with its ‘most friendly’ neighbour skyrocketed to over $3.1 billion as of 8MFY15 – arguably the biggest ever trade gap with China.
While the central bank’s latest country-wise commodity trade data is unavailable, the seven-month numbers provide important clues. The most notable increases came in the categories of iron and steel (up 98% YoY to $409 million), nuclear reactors, boilers, machinery and mechanical appliances (up 60% YoY to $510 million), man-made staple fibres (up 20% YoY to $140 million), and railway and tramway locomotives, rolling-stock and parts thereof (510% YoY to $69 million). BR Research would share more details as and when they are available.
In terms of exports, the decline was obvious. Cotton exports, which has been Pakistan’s top export to China in recent years, declined by a tremendous 28 percent year-on-year in 8MFY15 on account of lower demand from China.
The Commerce Minister Engineer Khurram Dastgir Khan has already expressed his dissatisfaction with these results and has demanded that the reasons behind the disappointing numbers be identified and addressed. Let’s wait and see what findings are brought by his office to the table in due course.