Export of cotton yarn to China soar (Pakistan)

The cotton yarn export to China registered a record high at 94 per cent increase in terms of volume which certain to hit export of value added textiles from Pakistan. Sources in textile circles expressed concern that if the power crisis allowed to persist the export of value added textiles including bed wear, knitwear, fashion apparel, towel etc are likely to badly hit during current financial 2013. According to latest numbers by Pakistan Bureau of Statistics (PBS), textile exports for the month of July came in at US$1.09billionn, down 2.7% YoY and a muted sequential growth of 0.8% MoM.

However cotton yarn export revenue has surged 48% YoY to US$172million, largely driven by 94% increase in volumes while average unit prices have dropped 24% YoY tracking 37% decline in cotton prices in Jul). The value chain, product categories such as knitwear, bed wear and garments remain laggards with export revenue declining by 5-15% YoY, despite average unit prices remaining downwards.

As far as size of cotton crop was concerned it is estimated at 15 million bales which is matching to previous year’s cotton crop, however ending stocks have been further increased to 74.7mn bales which indicate weak underlying demand in major regions including US & Euro zone. The industry sources attributed the large buildup in stock piles to China where purchases for the national reserve program will push ending inventories up to 34.2million bales. However any significant alterations in China’s reserve policy could have a material impact on the international cotton price landscape sources said.