Equity Analysis /

Pakistan Textiles: Feb’23 - Another poor month for exports

  • Textile exports decline to US$11.2bn during 8MFY23, down 11% YoY.

  • Over-piled inventories among major retail outlets in USA & Europe have led to lower export orders.

  • Removal of subsidies, peaking interest rates and a fall in demand to negatively impact the earnings of the sector.

Intermarket Securities
17 March 2023

Pakistan’s total exports in February 2023 clocked in at US$2.2bn, down 2% MoM and 9% YoY. The contribution of textile exports fell from 7-month average of 61% of total exports to 54% in February. Textile exports were recorded at US$1.1bn in Feb’23, with all textile sub-categories having a poor month, bringing total textile exports to US$11.2bn during 8MFY23, down 11% YoY. The overall slowdown is largely due to higher global inflation leading to a fall in demand, lower availability of cotton in the local market, and elevated energy prices.

Key highlights in Textile exports

Cumulative exports of the value-added textile segment during 8MFY23 declined to US$7.9bn, down 9% YoY. The decline is mainly attributable due to a fall in Knitwear exports. This came in as a result of falling purchasing power due to increasing rate of inflation curbing the overall demand. Knitwear exports clocked in at US$0.3bn in Feb’23, down 34% YoY and 18% MoM.

Readymade garments and home textile exports were down by 11% YoY, together clocked in at US$4.2bn in 8MFY23. Declining demand amidst the overall slowdown have led to inventory pileups across Europe and USA as many brands have delayed their orders, resulting in lower export orders.

Owing to limited availability of local cotton, import restrictions, and weak demand from the downstream value added sector, yarn exports declined by a staggering 57% YoY and 18% MoM. Overall yarn volumes decreased by 37% YoY and 43% MoM as the aforementioned factors more than offset the resumption of orders from China post lockdowns.


Moving forward, textile exports will likely slump further in the remaining months of FY23 as global inflationary pressures appear entrenched. Removal of subsidies, increasing interest rates and fall in overall demand will negatively impact the earnings of the sector in upcoming results. That said, given the listed textile sector has already corrected by a sharp 14% FYTD, it is possible that the worst may largely already be in the price.