Record Rice Leads Exports
Published on: January 25, 2024.
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December 2023 Exports Reach Highest in 18 Months
In December 2023, Pakistan’s goods’ exports surged to $2.8 billion, marking the highest export earnings in 18 months. This achievement ranks third on the list of highest-ever monthly export earnings. However, what makes this notable is not just the value but also the composition of exports.
For the first time in at least 15 years, the share of textiles in exports has fallen below 50 percent, except for the peak-Covid month of April 2020 when industrial activity was at a standstill. Textile’s average share in total goods’ exports since 2011 has been 60 percent. Although this trend requires more observation, looking at the numbers for the first half of fiscal year 2024 (1HFY24), it seems that textile’s share has decreased to 55 percent, the lowest in 10 years.
This is a rare occurrence in Pakistan’s trade history where overall exports show positive growth despite a decline in textile earnings. Textile exports have decreased by 5 percent compared to the previous year, mainly due to a sharp reduction in unit values across major categories such as knitwear and readymade garments. While export quantities have shown modest growth, the low unit values have dragged down overall exports for these key textile categories.
The knitwear segment has experienced the biggest decline in unit values, seeing a 38 percent decrease during 1HFY24. Similarly, the average unit value of export for readymade garments has dropped to $3.1 per piece, down 15 percent year-on-year. This decline in unit export price suggests that Pakistan’s value-added exports may be targeting lower-end segments compared to previous years.
On the other hand, the food group has been a significant contributor to Pakistan’s exports, experiencing an impressive 50 percent year-on-year growth during 1HFY24. In December 2023, the food group accounted for 30 percent of total exports, the highest monthly contribution ever, except for April 2020. Rice exports, in particular, have increased by 48 percent in quantity terms, reaching a record half-yearly number of 2.5 million tons. The unit value of rice exports has also risen by 19 percent to $637 per ton, resulting in 1HFY24 exports worth $1.6 billion, a 77 percent increase compared to the previous year.
Overall, exports during 1HFY24 have increased by $0.7 billion in absolute terms. Rice alone has contributed $0.7 billion to the export tally during this period, surpassing the $0.4 billion loss in textile export earnings. Pakistan’s goods’ exports are on track to exceed $30 billion in FY24, which would only be the second time in history. However, achieving this milestone will depend on how the upcoming government tackles energy prices and currency.
