Pakistan's Denim Exports to US Soar 62% in First Six Months of 2021
By Riaz Haq
CA
Pakistan exported $38 million worth of denim clothing to the United States in July 2021. This figure represents 140% growth over July 2020. Mexico's denim exports grew 58% while those of Bangladesh grew 24% in this period, according to the US Office of Textiles and Apparel.
Among the top Asian suppliers, Pakistan's exports to US jumped 62.16% year to date to $188.94 million. Bangladesh’s exports increased 42.82% to $362.38 million in this period while shipments from China were up 13.28% to $192.49 million.
Pakistan’s textiles and clothing exports are expected to rise in the coming months as the US moves orders out of China and other neighboring 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.
The monthly average of apparel exports from Pakistan was $565.60 million in H1 2021, which is expected to rise by 13.44% in H2 2021 to reach $641.60 million, according to a report in Fiber2Fashion. The US, the UK, Germany, Spain and France were the top importers of Pakistani apparel in H1 and accounted for approximately 68.27% of total apparel exports of the country, according to Fibre2Fashion’s market analysis tool TexPro.
Pakistan's textile and garment exports jumped 22.94% to reach $15.4 billion in fiscal year 2020-21 (July 2020-June 2021), according to data from Pakistan Bureau of Statistics. At the same time, the country's technology exports surged 47% to set a new record of $2.12 billion for the last fiscal year that ended in June 2021. Pharmaceutical exports also saw 25.3% growth to aggregate $241 million in the first 11months of FY 2021, indicating Pakistan's export diversification with higher value-added goods and services.
Overall, Pakistan's exports of goods for fiscal 2020-21 rose 13.7% to $25.63 billion. The nation's service exports increased 9.2% to touch $5.93 billion in fiscal 2021. Combined exports of goods and services added up to $31.56 billion in July 2020 to June 2021 period.
Imports grew 23.2%, much faster than exports as the economy recovered from the COVID-induced slump, widening the trade gap in the process. Energy demand drove imports of oil and gas to new highs.
During the last two fiscal years, Karachi has accounted for 51% of Pakistan’s exports, Lahore came in 2nd with 18%, Faisalabad 3rd with 12% and Sialkot 4th with 8.5%.
Record inflow of nearly $30 billion in remittances from overseas Pakistanis helped reduce the current account deficit to $1.85 billion in FY 2020-21. It's down 58.4% from $4.45 billion during FY 2019-20.
Overseas Pakistanis' remittances represent 10% of the country's gross domestic product (GDP). This money helps the nation cope with its perennial current account deficits. It also provides a lifeline for millions of Pakistani families who use the money to pay for food, education, healthcare and housing. This results in an increase in stimulus spending that has a multiplier effect in terms of employment in service industries ranging from retail sales to restaurants and entertainment.
Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020, more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade.
Pakistan ranks 6th among the top worker remittance recipient countries in the world. India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.
