Exports for the month of August 2020 have recorded a downfall of 19.5%, in dollar value, as compared to the same period last year.
This was discussed in an internal review meeting at the Ministry of Commerce today, chaired by the Advisor to the Prime Minister on Commerce and Investment, Mr. Abdul Razak Dawood.
During the same month, the imports also dropped by 20% as compared to August 2019. Similarly, the overall trade balance has improved by 20.6% in August 2020 compared to the same month last year.
Despite the decline in August, some of the products, like tractors, iron, and steel, chemicals, and cement have posted a growth of 186%, 100%, 90%, and 30% respectively compared to August 2019.
It was mentioned in the meeting that due to heavy rains in the country, there were delays in obtaining and analyzing the data. It was further discussed in the meeting that the rains and consequential urban flooding, particularly in Karachi, caused significant problems in the existing infrastructure, disrupting the supply chains and affecting the exports.
Power outages, slow business activities, delays in transportation, and hampering of port operations are some of the issues faced by the exporters due to unprecedented monsoon rains in the country.
“However, the positive sign is that regardless of this temporary decline, Pakistan’s trade balance continues to improve,” said Dawood. However, no official numbers were disclosed.
It is worth mentioning that the Commerce Ministry usually releases provisional foreign trade figures during the first few days of each month in case of slight variation (negative or positive) in exports and a substantial decline in imports.
Pakistan Bureau of Statistics (PBS) is expected to release provisional foreign trade figures within the next few days or so.
Dr. Aadil Nakhoda, an economist and Assistant Professor at IBA, Karachi, told ProPakistani,
This volatility is indeed something worrying. It can also indicate the nature of the export orders received earlier, that is diversion away from other countries as well as time-sensitivity of the orders. This also shows that supply chains are very delicate and requires better integration. There are way too many factors though. However, there is a clear need for supply chain management and better trade integration with alternate sources. That is why access to markets is extremely important and government must pursue FTAs.
The Advisor stated that the exporters are encouraged that despite the calamity of rain and flooding, they must pursue Make in Pakistan policy and export-led growth.
“I have every confidence in our exporters that they will make up for the loss of August,” the Advisor said.
On August 26, 2020, Razak Dawood said that because of heavy rains, particularly in Karachi, Pakistani export consignments are being delayed, hence exports in August may be affected.