The tacit improvement in textile group exports witnessed over the past couple of months has done little to dent the overall declining trend in the countrys exports during the ongoing fiscal year.
Trade data published by Pakistan Bureau of Statistics (PBS) reads like a rerun of the previous month, where the "other manufactured" segment stood guilty of the largest drop in sales overseas. Exports under that head are down by about $371 million in the first five months of the current fiscal.
An earlier column entitled, "Naphtha, jewellery weigh heavily on export fall" had highlighted that jewellery exports have been severely impacted by export restrictions on gold introduced through SRO-760. It had also drawn attention to sagging exports under engineering exports, particularly the "other machinery" segment.
In November that impact coupled with the plop of $94 million in "petroleum group" exports to constitute the major proportion of total exports that have dwindled by $433 million in 5MFY15.
Petroleum group exports had been propped up in part by naphtha exports until September. However, naphtha exports have dropped to zilch in previous two months. Exports of other petroleum products have also dwindled from monthly average of just over $10.1 million in 4MFY15 to just $0.825 million in the outgoing month.
The earlier increase in exports of naphtha, crude oil and petroleum products was flagged as a temporary spike. Now that those streams appear to have dried up again, the textile sectors performance appears to be the main horse to bet on for meeting export targets in FY15.
But the textile sector itself appears pivoted at an inflexion point. Exports of raw cotton, cotton cloth and yarn have all reported double digit drops in 5MFY15, when compared to similar period of the previous year.
During the same period, exports of knitwear and readymade garments have provided a cumulative jump of $180 million over 5MFY14. According to industry sources, those gains are due in large part to higher demand from EU on the back of GSP+ status, lending credence to fears that a slowdown in that region could take a bite out of conventional exports as well as other segments contributing to foreign exchange earnings for the country.
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Exports Breakup
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$ (mn) 5MFY15 5MFY14 Diff
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Food 1,611 1,617 -6
Textile 5,719 5,666 53
Petroleum Group 392 485 -94
Other Manufacturing 1,646 2,017 -371
All Other Items 556 571 -16
Total exports 9,923 10,356 -433
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Source: PBS
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