As per Synthetic and Rayon Exports Promotion Council (SRTEPC), Pakistan’s textile profits fell by 62 per cent Y-o-Y in FY20 due to a dismal Q4 FY’20 performance. Its textile exports dropped by 6 per cent Y-o-Y to $12.5 billion due to lower quantity exported. In the first eight months of FY20, Pakistan’s textile exports increased by 8 per cent Y-o-Y. They dropped by 29 per cent Y-o-Y in last four months due to either postponement or cancellation of orders amidst COVID-19.
Textile revenues declined 21 per cent Y-o-Y due to the closure of retail shops during the lockdown period. As a result, overall revenues declined by 3 per cent Y-o-Y in FY20. Gross margins too declined by 2.2 per cent Y-o-Y. This was largely due to weak economies of scale due to the pandemic, higher cotton prices as local production declined further, and higher energy costs.
Cotton prices jumped by 5per cent Y-o-Y to Rs8,984/mound during 2QFY20, the main cotton procurement period, over the news of cotton shortage.