Diversion of orders out of China to benefit Pakistan’s textile exports

Pakistan’s textiles and clothing exports are expected to rise in the coming months due to the diversion of the orders out of China and other neighbouring Asian countries. The focus on more value addition and new textile policy of the country will support the organic growth in exports. The depreciation of PKR has also boosted textile exports.

North American and European countries have placed orders for textiles and clothing goods in China, Bangladesh and other Southeast Asian economies, which is why the textile mills and processing units of these countries are working at full capacity. Hence, new orders are being diverted to Pakistani suppliers and the rate is rising consistently.

The government of Pakistan is also supporting the exporters by minimising duty and taxes on imports of most raw materials in order to bring down the input costs of exportable products. The ministry of commerce has allotted PKR 6 billion under duty drawback on local taxes and levies (DLTL) scheme. Out of the total fund, PKR 5.60 billion is allotted to the textile sector as it is a major earner of foreign exchange. This has resolved the liquidity issues to some extent in the country’s export sector.

In addition to the above, large-scale manufacturing (LSM) sector of the country grew at a rate of more than 10 per cent in the last fiscal owing to the country’s effective industrial growth policies. The Sino-US trade tussle has also played a pivotal role in boosting the textile and clothing exports of Pakistan.

The monthly average of apparel exports from Pakistan was $565.60 million in H1 2021, which is expected to rise by 13.44 per cent in H2 2021 to reach $641.60 million. The US, the UK, Germany, Spain and France were the top importers of Pakistani apparel in H1 and accounted for approximately 68.27 per cent of total apparel exports of the country, according to Fibre2Fashion’s market analysis tool TexPro.

Pakistan’s monthly average of textile exports was $278.77 million in H1 2021. It is expected to drop by 6.52 per cent in H2 2021 to reach a monthly average of $260.58 million. Bangladesh, the US, Turkey, Italy and Sri Lanka were the top five importers of Pakistani fabrics in H1 2021 and accounted for approximately 46.64 per cent of total fabric exports of the country.

France, Philippines, the US, the UK and Taiwan were the top five destinations for Pakistani textile fibres in H1 2021 and accounted for approximately 56.40 per cent of total textile fibres export of the country. China, Bangladesh, Portugal, the US and Turkey were the top five markets for Pakistani textile yarns in H1 2021 and accounted for approximately 85.63 per cent of total textile yarns exports of the country.

The monthly average of home textile exports of Pakistan is expected to go up from $393.22 million in H1 2021 to $448.23 million in H2 2021. The US, the UK, Germany, Netherlands and France were the top five importers of Pakistani home textiles in H1 2021 and accounted for approximately 70.09 per cent of total home textiles exports of the country.

The collective monthly average of textiles and clothing exports of Pakistan was $1237.55 million in H1 2021. This is expected to increase by 9.12 per cent in H2 2021 to reach $1350.40 million.

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