Pakistan's textile and apparel export value in Sep below the average for three consecutive months

1. Pakistan's textile and apparel exports declined to US$1.527 billion in Sep

Pakistan’s textile and apparel export value declined by US$48 million to US$1.527 billion in Sep 2022, down by 3 percentage points month-on-month, yet up 2.68% from last year. This year, the textile and apparel export orders to European and American market flowed back to Southeast Asia, which boosted Pakistan's textile and apparel exports to some extent. So far, this year's monthly textile export value were all higher than the same period last year, but had been lower than the monthly average of this year for three consecutive months. At the same time, Pakistan's textile and apparel import value in September decreased sharply to 293 million US dollars, down by nearly 20%.

2. Pakistan's cotton import dropped to 41,700 tons in September

In September, Pakistan's cotton import volume did not continue to increase as expected, but fell slightly to 41.7kt due to a number of reasons. First of all, a look at the specific US cotton contracts and shipment data could know that the delay in the shipping of US cotton to Pakistan this month had led to a low overall arrival volume, thus it was expected that the arrival volume of Pakistan's imported cotton would rebound significantly next month. At the same time, as US cotton prices moved down in fluctuation recently, a small number of defaults occurred among Pakistan’s cotton buyers. Secondly, the USDA held conservative expectations for the reduction of Pakistani cotton output after the floods, thus the decline in Pakistan’s cotton imports in September reflected the easing of Pakistan's tight cotton supply to a certain extent.

3. Exports of Pakistan's pure cotton yarn reduced to 21,500 tons in Sep

Pakistan’s pure cotton yarn exports volume reduced by 1.6kt from Aug to 21.5 kt in Sep, down 25.61% year-on-year. This year, the thin exports of Pakistan’s yarn were opposite to its strong textile and apparel exports, and the reduced demand from the Chinese market was the main cause for the decline in cotton yarn exports. Recently, Pakistan’s cotton prices remained relatively stable, so the downward trend of cotton yarn offers was not obvious, and the offers in Pakistan were higher than spot prices in China’s local market for a long time. The production of Pakistan’s siro-spun yarn continues to drop, and its dependence on the Chinese market kept decreasing.

4. Summary

Recently, Pakistan's textile and apparel export weakened compared with the first half of the year, and the export value was lower than the monthly average of this year for three consecutive months, and the year-on-year growth was very likely to turn negative next month. Compared with other countries in Southeast Asia, Vietnam's textile and garment export still maintained a rapid growth, while that of Bangladesh and India entered a downward stage, which showed that the textile and apparel retails in European countries and the US were gradually shrinking. At the same time, with the price decline of Xinjiang cotton this year, Chinese siro-spun yarn will have more price advantages over that of Pakistan, thus the exports of Pakistani yarn will still be under great challenges.