A day after the country witnessed a record inflow of remittances from overseas Pakistanis, the textile sector shared encouraging news for the economy marking double-digit growth in exports to over $1 billion in July.
The textile sector regained its momentum as it made exports of over $1.27 billion in July, which is 33% higher than June 2020, according to the Pakistan Bureau of Statistics. The textile exports of Pakistan surged by 33% month-on-month in July 2020 to $1.27 billion compared to June 20 which recorded textile exports of $959 million.
This rise in exports of Pakistan was mainly led by higher cotton prices that resulted in higher sales revenue as cotton prices surged to levels of an average of $63/lbs. This rise in international cotton prices was mainly due to the phenomenon of recovery in global economic activities.
On a year-on-year basis, the textile exports surged by 14.40% from July 2019, i.e. $1.11 billion.
The growth in exports was also driven by the depreciation of the local currency against Dollar and Euro when compared with July 2019.
In June, the textile association reported that Pakistan’s textile units are receiving numerous orders from various countries, which is an encouraging trend for the country’s economy as the export orders could enhance the sector’s utilization of 80-90% production capacity in the current quarter.
The export earning of the textile sector is likely to increase by $3 billion this year keeping in view the demand in the international market, which will not only increase exports of the sector with a possible value of $17.5 billion but it could enhance the overall exports of the country by $27 billion in the next financial year, said All Pakistan Textile Mills Association (APTMA) in a letter sent to Prime Minister last month.
Exports of Other Sectors
Cement and Foods exports also surged on a monthly basis to $23 million and $318 million compared to June’s exports of $17 million and $306 million. These exports mainly surged due to the revival in the economic and industrial activities in the world.
In terms of US dollars, the exports in July 2020 stood at $ 2.001 billion (provisional) as compared to $ 1.599 billion (provisional) in June 2020 showing an increase of 25.14% and by 6.10% as compared to $ 1.886 billion in July 2019.
It is believed the trade numbers will remain on the revival side as economic activity and demand in the western countries helping Pakistan exports to rise during the month of August, the research report said. Further, the higher expectation for foreign currency outflow in the current financial year 2020-21, as FITCH expects more than $10 billion external payments in the year FY21, the demand for imports will likely remain sluggish and volatile mainly on the rising pressure on the USD-PKR parity.