Textile exports: Down again

Export numbers for the month of May are in and there isn much reason to rejoice in the textile industry as the downtrend continues. Overall textile exports were down by one percent year-on-year for the eleven months ended FY15, and three percent down over the preceding month.
Articles of cotton formed over 86 percent of all textile exports. Of these, the value-added segment (knitwear, bed wear, readymade garments, towels) accounts for nearly 61 percent, while the basic segment (raw cotton, cotton yarn, cotton cloth) forms the rest. The 11MFY15 numbers show that the basic textile sector is failing to compete, but there has been some improvement in the value-added segment. Raw cotton fell by 26 percent, cotton yarn declined by 12 percent, and cotton cloth lost 9 percent year-on-year. On a month-over-month comparison, the same declined by 28 percent, 3 percent, and gained 1 percent, respectively. For the value-added segment, knitwear and bed wear exports improved by 2 and 7 percent, respectively, over the eleven-month period up till May. Readymade garments saw the largest improvement of 12 percent, while towels were down by 6 percent. However, the numbers are a bit of a hodgepodge, as month-on-month comparisons tell a different tale; knitwear and bed wear exports declined by 12 and 5 percent respectively, and readymade garments only improved by 4 percent.
The non-value-added cotton products are fetching a lower price in the international market amid the persistently depressed prices. An industry expert told BR Research that yarn and raw cotton are not fetching a decent price and aren nearly as lucrative as the value-added cotton exports, which earn 6-8 times more.
Just one more month until the new fiscal kicks in, and all the Pakistani textile companies are hoping to put this miserable year behind them. Unfortunately, that seems unlikely, as there seems to be no immediate solution to their problems on the horizon - Pakistans largest market, China, isn open for business; depressed global prices; power outages and increased cost of production; regional competitors like India, Bangladesh, and Sri Lanka snatching up the international market; an overvalued rupee. Its more unfortunate that instead of quelling some of these issues, Budget FY16 piled on a tax raise of one percent. There is still no zero-rating on exports, and one isn too optimistic about the Rs64 billion promised under the Textile Policy (2014-2019) - a meager amount to begin with.