Pakistan's Denim Exports to US Soared 62% in First Six Months of 2021

Pakistan exported $38 million worth of denim clothing to the United States in July, 2021. This figure represents 140% growth over July, 2020. Mexico's denim exports grew 58% while those of Bangladesh grew 24% in this period, according to the US Office of Textiles and Apparel. 

US Denim Apparel Imports. Source: US Office of Textiles and Apparel

Among the top Asian suppliers, Pakistan's exports to US jumped 62.16% year to date to $188.94 million. Bangladesh’s exports increased 42.82% to $362.38 million in this period while shipments from China were up 13.28% to $192.49 million. 

Pakistan’s textiles and clothing exports are expected to rise in the coming months as the US moves orders out of China and other neighboring Asian countries. The focus on more value addition and new textile policy of the country will support the organic growth in exports. The depreciation of PKR has also boosted textile exports.

The monthly average of apparel exports from Pakistan was $565.60 million in H1 2021, which is expected to rise by 13.44% in H2 2021 to reach $641.60 million, according to a report in Fiber2Fashion. The US, the UK, Germany, Spain and France were the top importers of Pakistani apparel in H1 and accounted for approximately 68.27% of total apparel exports of the country, according to Fibre2Fashion’s market analysis tool TexPro.


Pakistan's textile and garment exports jumped 22.94% to reach $15.4 billion in Fiscal Year 2020-21 (July 2020-June 2021), according to data from Pakistan Bureau of Statistics.  At the same time, the country's technology exports surged 47% to set a new record of $2.12 billion for the last fiscal year that ended in June 2021. Pharmaceutical exports also saw 25.3% growth to $241 million in the first 11months of FY 2021, indicating Pakistan's export diversification with higher value added goods and services. 

Pakistan Textile/Apparel Exports. Source: Arif Habib Ltd
Pakistan Textile Exports FY 2006-2021. Source: APTMA

Overall, Pakistan's exports of goods for fiscal 2020-21 rose 13.7% to $25.63 billion. The nation's service exports increased 9.2% to $5.93 billion in fiscal 2021. Combined exports of goods and services added up to $31.56 billion in July 2020 to June 2021 period. 

Pakistan Tech Exports. Source: Arif Habib Ltd. 


Imports grew 23.2%, much faster than exports as the economy recovered from the COVID-induced slump, widening the trade gap in the process. Energy demand drove imports of oil and gas to new highs. 

Pakistan Current Account Balance. Source: Arif Habib Ltd. 

During the last two fiscal years,  Karachi has accounted for 51% of Pakistan’s exports, Lahore came in 2nd with 18%, Faisalabad 3rd with 12% and Sialkot 4th with 8.5%. 

Pakistan's Exports by Cities. Source: FBR

Record inflow of nearly $30 billion in remittances from overseas Pakistanis helped reduce the current account deficit to $1.85 billion in FY 2020-21. It's down 58.4% from $4.45 billion in FY 2019-20. 

Overseas Pakistanis' remittances represent 10% of the country's gross domestic product (GDP). This money helps the nation cope with its perennial current account deficits. It also provides a lifeline for millions of Pakistani families who use the money to pay for food, education, healthcare and housing. This results in an increase in stimulus spending that has a multiplier effect in terms of employment in service industries ranging from retail sales to restaurants and entertainment. 

Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020,  more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade. 


Pakistan ranks 6th among the top worker remittance recipient countries in the world.  India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.  

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Comments

Riaz Haq said…
Bumper #cotton crop and high global prices to help #Pakistani farmers this year. National rough estimates put cotton production between 7.5 and 8.5 million bales.Cotton price has surged to Rs14,500 per maund. #agriculture #economy #Pakistan #textiles https://www.dawn.com/news/1650366

https://twitter.com/haqsmusings/status/1445783179051163655?s=20

National rough estimates put cotton production between 7.5 and 8.5 million bales against the official estimates of 10.5 million bales. The country will need to import around 5.0 million bales to meet demand of the local textile industry.

Cotton surges to Rs14,500 per maund

LAHORE: A bullish trend again gripped the cotton market on Tuesday as white lint rate hit Rs14,500 per maund for the third time during the current season.

Brokers say the main reason behind the hike in local white lint rate is reports that cotton futures in the New York market are trading at their highest price in a decade.

Naseem Usman, Karachi Cotton Brokers Forum chief, says that New York cotton futures traded at $1.07 on Monday, sending a panic wave among the textile industry relying heavily on imported lint after failure of the local crop year after year.

He says that local cotton rates are likely to go further up in line with the surge in New York future prices amid heavy buying by China. Pakistan imports cotton from the US, Brazil, Argentina, Australia, South Africa and Central Asian States to meet requirements of its textile industry.


Mr Usman says increasing disparity among dollar and rupee, recent spell of rains in Punjab’s cotton belt, reports of white-fly, mealybug and pink bollworm attacks as well as unavailability of latest reliable data about the crop size are adding to the worries of the local buyers.

Punjab produces 80 per cent of cotton in the country. It had fallen short of the crop sowing target as only 3.1 million acres against the target of 4.0 million acres could be sown for the 2021-22 season. National rough estimates put cotton production between 7.5 and 8.5 million bales against the official estimates of 10.5 million bales. The country will need to import around 5.0 million bales to meet demand of the local textile industry.

Ijaz Ahmed Rao, a cotton grower from Lodhran, says those who have sown the crop early in the season are harvesting 40 to 50 maunds per acre, while the average yield of other growers has been estimated at 25 to 30 maunds.

Responding to a query, he says that pink bollworm and climatic conditions have hit the lint production. “In the desert area, the crop apparently looks healthy with a good number and size of balls. But, when one opens a ball, it’s found to be pink.”

In some areas, he says, a fungus has hit the plants making them look burnt out. Seemingly the difference in atmospheric and soil temperatures has damaged the crop, he adds.
Riaz Haq said…
#Pakistan projects $5 billion of new investments in #textile sector. Industry is working at or near capacity with orders currently booked for a year. Textile #exports expected to jump from $15.4 billion last year to $25 billion by 2025. #economy https://tribune.com.pk/story/2323805/5b-investment-in-textiles-to-boost-exports

KARACHI:
Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood has welcomed the planned investment of $5 billion in the textile sector of Pakistan aimed at establishing 100 new units.

“Our Make in Pakistan policy is beginning to bear fruit,” he said in a statement on Thursday. “We have been informed that investment of approximately $5 billion is in the pipeline under which 100 new textile units are expected to be established.”

He added that apart from enhancing the export capacity, the new units would jointly create around 500,000 jobs, he said.

The government has reversed the de-industrialisation process in Pakistan and placed the country’s industrial sector on the path of sustainable growth, said Dawood.

Topline Securities analyst Saad Ziker stated that the textile sector was all set to boost exports after foreign shipments rose 29% year-on-year to $2.9 billion in the first two months of current fiscal year 2021-22.

The textile industry “is often termed the backbone of Pakistan’s economy, therefore, there is a need to enhance support for the sector in terms of investment and subsidies,” he said.

Elaborating the “Make in Pakistan” policy, he emphasised that new investment under the initiative would steer a turnaround in Pakistan’s textile industry.

“It will increase the number of textile units and reduce unemployment by creating around half a million employment opportunities,” said Ziker.

Read Textile mills aim to meet $21b export target

The analyst pointed out that according to the Pakistan Cotton Ginners Association cotton arrivals into factories were calculated at 3.8 million bales by October 1, 2021 in the current season compared to 1.9 million bales in the same period of last year.

He pointed out that the twofold increase had dispelled the fear of shortage of cotton and provided relief for the exporters as they would be able to fulfill their export orders swiftly.

Arif Habib Limited analyst Arsalan Hanif said that textile companies were currently enjoying excessive export orders and they were booked for almost the entire current fiscal year.

To recall, textile exports stood at $15.4 billion in fiscal year 2020-21 against $12.5 billion in 2019-20, portraying a growth of 23%.

“Conducive policies of the government coupled with high export orders have encouraged textile companies to expand their production capacities, which is expected to increase Pakistan’s exports in the foreseeable future,” said Hanif.

He projected that the investment of $5 billion in the textile sector would increase textile exports to $25 billion by 2025 besides creating new job opportunities.
Riaz Haq said…
#Pakistan's July-Sep #oil sales jump 24% on industry revival, fuel switching to 5.863 million tons. It's driven by rebound in #industrial & #transportation activity as well as rising demand for fuel oil following a rise in #LNG prices. #COVID19 #economy http://www.spglobal.com/platts/en/market-insights/latest-news/oil/100821-pakistans-july-sep-oil-sales-jump-24-on-industry-revival-fuel-switching


Riaz Haq said…
Pakistan is on track to achieve a record $32 billion in remittance inflows in the current fiscal 2021-22 as its over nine million overseas workers remitted a record $8.04 billion during the first quarter ended on September 30.

Foreign exchange inflows may hit $70 billion in 2021-22 on rising exports and surging RDA
https://www.khaleejtimes.com/business/pakistan-to-exceed-31-billion-remittances-target

Textile Exports figures for September 2021 show a business of $1.503 billion, 26% increased growth over the corresponding year with 28% Textile export growth in Q1 FY22 (from $3.5 billion to $4.5 billion)

https://twitter.com/APTMAofficial/status/1446716383027412995?s=20
Riaz Haq said…
With regard to World Bank’s growth estimates of 3.5 percent in FY2021 against National Accounts Committee (NAC) estimates of 3.94 percent, released by the Pakistan Bureau of Statistics (PBS), it is mentioned that the WB estimates are based on unrealistic assessment.

https://www.thenews.com.pk/print/898697-pakistan-rejects-wb-s-gdp-assessment-as-unrealistic

The provisional estimate of GDP growth for FY2021 was 3.94 percent based on 2.8 percent growth in Agriculture, 3.6 percent growth in industry and 4.4 percent growth in services.

However, large-scale manufacturing (LSM) growth was provisionally taken as 9.3 percent in NAC for estimating GDP growth of 3.94 percent. LSM data is available with a two-month lag and the recent data released by PBS on LSM recorded growth of 15.2 percent for FY2021.

Further, recent data on crops mentioned by Federal Committee on Agriculture (FCA) suggest the production of important crops is higher than taken in NAC, 2021. Wheat production is recorded at 27.5 million tons as compared to 27.3 million tons, while production of maize is 8.9 million against 8.5 million tons released by PBS for estimating GDP growth 3.94 percent. After incorporating the latest available information, the GDP growth in FY2021 will improve further above 3.94 percent as compared to 3.5 percent estimates by the WB.

For FY2022, WB projection of 3.4 percent for GDP growth is again underestimated. It is pertinent to mention that economy of Pakistan has shown V-shaped recovery in FY2021 without creating any external and internal imbalances.

The government said it was committed to ensure that the growth momentum remains intact with macroeconomic stability.

Thus, it is expected that GDP growth for FY2022 will remain close to 5 percent.

In this context it is worth mentioning that global GDP growth rate in 2020 was recorded at -3.2 percent and is projected to grow by 6.0 percent and 4.9 percent in 2021 and 2022 respectively.

On the basis of fast recovery expected globally, especially Pakistan’s main trading partners, it is expected to be translated to the domestic economy as well.

Domestically, the production of important crops is encouraging like sugarcane 87.7 million tons (81.0 million tons last year), rice 8.8 million tons (8.4 million tons last year), maize 9.0 million tons (8.9 million tons last year), and cotton 8.5 million tons (7.1 million tons last year). While the target for wheat is set at 28.9 million tons (27.5 million tons last year).

Further, the government said it was taking measures to enhance agriculture performance such as Agriculture Emergency Program, Agriculture Transformation Plan, Prime Minister Kharif Package, incentives to the Livestock sector and increase in wheat support price.

Better crop production together with government’s measures, it is expected that the agriculture sector will perform better. Within industry, LSM recorded a growth of 2.3 percent in July FY2022. Due to the closure of industrial activities during holidays in Eid-ul-Azha and monsoon rains which spread over 15 days.

Further, domestic cement dispatches increased by 3.92 percent to 11.279 tons during July-September FY2022 (10.853 tons last year).

Car production and sales increased by 111.7 percent and 92.8 percent respectively during July-August FY2022, while tractor production and sales increased by 38.7 percent and 18.5 percent respectively. Similarly, total oil sales increased by 21 .0 percent to 5.8 million tons during July-September FY2022 (4.8 million tons last year).

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