Soaring freight costs impact exports
Pakistan’s Tehreek-e-Insaf (PTI) government faces another hurdle in its efforts to improve exports, as rising freight costs kept textile exports stagnant in August 2021.
The country’s textile exports amounted to $ 1.46 billion in August 2021, registering a meager 2% month-over-month increase in rupees, data from the Pakistan Bureau of Statistics (PBS) revealed .
According to market analysts, exports have been affected by global port congestion combined with soaring freight costs. The cost of a container from China to Pakistan has tripled.
Despite growing demand for textile products around the world, Pakistani exports have remained stagnant as congestion at global ports and high freight costs triggered a slowdown in export orders, said Arsalan Hanif, analyst at Arif Habib. Limited.
Citing data, he said foreign value-added textile shipments fell 4% in August, while knitwear and ready-to-wear exports fell 7% and 6% respectively. month to month.
“If this trend continues, it may result in the cancellation of export orders and our customers may prefer to place orders with neighboring countries to reduce the cost of imports by paying lower freight charges,” Hanif said.
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He pointed out, however, that textile exports rose 45% in August 2021 compared to the same month last year due to a weak base effect.
Endorsing his remarks, Topline Research analyst Saad Ziker said textile exports rose 8% and 5% in August 2021 compared to average exports for the past six and three months respectively.
“Foreign shipments of cotton yarn and non-cotton yarn increased 15% and 71% respectively in August on a monthly basis,” he said.
Compared to last year, Pakistan’s textile exports increased 45% in dollars and 42% in rupees in August 2021, he said.
The growth is largely due to an unusually low base last year when global and domestic operations were disrupted by Covid-led restrictions and lockdowns, Ziker said.
He pointed out that the Pakistani textile industry enjoys an advantage due to the restrictions of Covid-19 in regional countries such as India and Sri Lanka.
Posted in The Express Tribune, September 18e, 2021.
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