The first surge in bulk textile orders for Pakistan’s Textile Sector was observed when the first wave of the pandemic resulted in lockdowns across countries, including key textile exporters like India and Bangladesh. Orders were diverted and poured into Pakistan’s textile industry. As the lockdown was easing, the new and deadly wave of covid-19 in India, along with a decline in textile exports from China, is expected to give Pakistan’s textile exports another boost. As per the Pakistan Bureau of Statistics (PBS), exports of the textile sector were seen climbing by over 30 percent year-on-year in March-21. In comparison, there has also been a recovery on a month-on-month basis where textile exports increased by 9.8 percent.
As per PBS data, textile export 9MFY21 was up by a little over 9 percent yearly. Much of the growth in textile exports in March-21 and 9MFY21 is attributable to the growth witnessed in the value-added segment, particularly knitwear, bedwear, and home textile (all recording staggering double-digit growth year-on-year). Readymade garments continued their relatively slow-paced (23% YoY) growth in March-21 and 9MFY21 as changing global dynamics amid the pandemic has pushed the demand for home textiles much higher than garments. Export of cotton yarn also continued to see a spike for a second month in FY21 (up by 39% YoY in March-21), despite a shortage of yarn in the country and the textile companies crying duty-free import of yarn.
The month-on-month trend shows that the export growth was led by non-value-added segments such as cotton cloth (23% MoM). And a key reason for that, as highlighted by a research note by AKD Securities, is extra efforts by the local manufacturers to capture US textile imports from China after order cancellation from Xinjiang (that accounts for 0 percent of Chinese output) due to human rights violation.
