Export refinance: tough times bring efficiency gain

After growing by some 40 percent over pre-Covid levels, Pakistan’s textile industry exports receipts declined by 15 percent during the last calendar year 2023. Although the contraction appears particularly ominous for a country that is perpetually battling with a trade deficit leading to BoPcrises, the decline was not necessarily as alarming once the price effect is considered.

Between 2021 and 2022, the unit prices of Pakistan’s textile and apparel exports rose by 25 – 30 percent on average owing to the post-pandemic global commodity supercycle, egged on by supply chain bottlenecks caused by phased easing of lockdowns across the globe and, a war in the Black Sea. At the time, Pakistan’s traditional exporting industries greatly benefited from these supply chain bottlenecks, which eventually led them to ship historic quantities of textile products to buyers in destination markets, particularly the EU and North America.