Record Rice Leads Exports
Published on: January 25, 2024.
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December 2023 Exports Surpass $2.8 Billion, Breaking Records
In December 2023, Pakistan experienced a significant boost in its goods’ exports, reaching a total of $2.8 billion. This marks the highest export earnings in the past 18 months, ranking third on the list of highest-ever monthly export earnings. However, beyond the value, it is the composition of these exports that is truly remarkable.
For the first time in at least 15 years, the textile industry’s share in total exports fell below 50 percent, excluding the peak-Covid month of April 2020 when industrial activity came to a standstill. Traditionally, textile has accounted for an average of 60 percent of total goods’ exports since 2011. Although this shift may not indicate a long-term trend based on just one month, the first half of FY24 numbers suggest a noticeable change, with the textile industry’s share dropping to 55 percent, the lowest in a decade.
Despite the decline in textile earnings, Pakistan has achieved a rare feat in its trade history by maintaining positive growth in overall exports. Textile exports saw a 5 percent year-on-year decrease, largely driven by a significant reduction in unit values across various categories, including knitwear and readymade garments. While export quantities showed modest growth, the low unit values negatively impacted overall export figures for these key textile categories.
The knitwear segment experienced the most substantial decline in unit values, with a 38 percent year-on-year decrease during the first half of FY24. Meanwhile, the average unit value of export for readymade garments dropped to $3.1 per piece, down 15 percent year-on-year. This decline has resulted in a significant shift in the ratio of readymade to knitwear unit export prices, indicating that Pakistan’s value-added exports may now be catering to lower-end segments than before.
On the other hand, the food group has emerged as the driving force behind Pakistan’s export growth, with a remarkable 50 percent year-on-year increase during the first half of FY24. In December 2023, the food group accounted for 30 percent of total exports, reaching its highest monthly contribution ever, excluding April 2020. Rice exports played a significant role in this growth, with a 48 percent year-on-year increase in quantity at 2.5 million tons, the highest half-yearly number recorded. Furthermore, the unit value of rice exports rose by 19 percent to $637 per ton, resulting in a 77 percent year-on-year increase in exports during 1HFY24, totaling $1.6 billion.
In absolute terms, overall exports during 1HFY24 increased by $0.7 billion, with rice alone contributing $0.7 billion to the export tally during this period. This significant growth in rice exports more than compensates for the $0.4 billion loss in textile export earnings. Consequently, Pakistan’s goods’ exports are on track to exceed $30 billion in FY24, a milestone achieved only once before in history. The future of this growth will depend largely on the government’s handling of energy prices and currency stability.
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