Karachi: Cotton prices in the domestic market have witnessed improving, up 18 percent at Rs 5,800 after hitting a low of Rs 4,900 in last year, showing a strong prospective for its exports as it prices recovered again in international after diving below a $1 per lbs mark currently hover around US$1.03 per lbs.
Surprisingly, cotton arrivals till January 15, 2012 have surpassed 12.5mn bales (initial government target) to reach 12.8mn bales. Interestingly, the fortnightly flow came in at 797k bales, which was higher by 53% on a YoY basis. Though, fortnightly flows from here on are likely to slow down, we expect the country to record arrivals of 13.5-14.0mn bales in FY12.
The recent uptick in cotton prices and better than expected cotton crop production is likely to provide a stimulus to textile exports in 2HFY12. Nevertheless, the energy crisis in the country pose a great risk to meeting export orders by textile manufacturers.
The textile exports in 1HFY12 were recorded lower by 4.7%YoY at $5.96 billion which was mainly on account of lower cotton prices and lower export volumes of cotton yarn and raw cotton.
As per the latest data available, Pakistan’s textile exports in December 2011 were recorded at US$944.27 million, down 19.2%YoY. However, the same was up 15.3% on a MoM basis as cotton cloth, knitwear and bed wear depicted growths of 22-59% in monetary terms.
During the first six months textile exports were recorded at US$5.96 billion, down 4.7%YoY. While the exports grew on a monthly basis, lower cotton prices along with enhanced energy crisis in the country were major reasons for the fall in cumulative exports in 1HFY12.
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