Saturday, October 31, 2020

Pakistan's Exports Surging At The Fastest Rate in South Asia

With several major brands moving production to Pakistan amid the COVID19 pandemic, the country's exports have grown at a faster pace than those of Bangladesh and India, according to Bloomberg News. Pakistan's total textile shipments rose 7% in September, compared with India’s 6% and  Bangladesh’s 3.5%. 

South Asia Region's Exports. Source: Bloomberg

“Pakistan has seen orders shifting from multiple nations including China, India and Bangladesh,” said Shahid Sattar, secretary general at the All Pakistan Textile Mills Association, in an interview with Bloomberg's Faseeh Mangi. “Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months.”

Pakistan's Textiles Growth. Source: Bloomberg

Bloomberg attributed Pakistan's export surge to Prime Minister Imran Khan’s administration  to be the first in South Asia  to ease the COVID19 lockdown after controlling the spread of the disease. It helped draw companies like Guess Inc., Hugo Boss AG, Target Corp. and Hanesbrands Inc.

Investor Confidence: 

 Pakistan's benchmark stock index KSE-100 has soared 52% since March, beating runners-up Vietnam and India, and gaining twice as much as China, according to Bloomberg News. In spite of the rapid rise, the valuation of the KSE-100 listed companies is among the world's lowest with forward price-earnings multiple of just 7.4 times. Pakistan is heading for an IPO spree, with as many as 10 companies lining up to go public.

IPO Spree in Karachi Stock Market. Source: Bloomberg

V-Shaped Recovery:

With coronavirus spread contained, Pakistan economy is rebounding with V-shaped economic recovery.   Pakistanis have once again defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now. There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% in June, 2020.  The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News.  Pakistan has successfully overcome the challenges posed  by the pandemic and its economic impact. Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Covid19 Cases in Pakistan. Source: Our World in Data

Broad Recovery: 

The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now.  There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output has increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% if compared to June 2020. Month-wise trend of QIM from July, 2018 to July, 2020.    

Pakistan Monthly Quantum Index of Manufacturing. Source: PBS

Cement Sales: 

Pakistan is once again experiencing a construction boom with new incentives under Naya Pakistan Housing Program. Monthly cement sales rose to near all-time high of almost 5 million tons in July 2020 as construction activity picked up in both housing and CPEC-related projects. 

Pakistan Cement Sales. Source: Bloomberg

Car Sales:

Gasoline sales in June, 2020 hit new record  and local car deliveries rose to about 10,000 units as people returned to work after easing of lockdown in May, 2020. Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.  

Pakistan Car Sales Recovery. Source: Bloomberg

Multiple Sectors Growing: 

Sectors including food, beverages & tobacco, coke & petroleum products, pharmaceuticals and non metallic mineral products saw an increase in production in July 2020.  Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., was quoted by Bloomberg as saying, “It has surprised everybody".  Aslam expects Pakistan economy at 4%-5% in current fiscal year, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”


Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. With several major brands moving production to Pakistan, the country's exports are rebounding faster than its peers in South Asia.  Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Related Links:

Haq's Musings

South Asia Investor Review

COVID19 in Pakistan: Test Positivity Rate and Deaths Declining

Naya Pakistan Housing Program

Construction Industry in Pakistan

Pakistan's Pharma Industry Among World's Fastest Growing

Pakistan to Become World's 6th Largest Cement Producer by 2030

Is Pakistan's Response to COVID19 Flawed?

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Coronavirus Antibodies Testing in Pakistan

Can Pakistan Effectively Respond to Coronavirus Outbreak? 

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

Trump Picks Muslim-American to Lead Vaccine Effort

Democracy vs Dictatorship in Pakistan

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

Panama Leaks in Pakistan

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network


Anonymous said...

In 2018 Pakistan exported a total of $26.7B, making it the number 69 exporter in the world. During the last five reported years the exports of Pakistan have changed by -$1.73B from $28.4B in 2013 to $26.7B in 2018.

The most recent exports are led by House Linens ($3.5B), Rice ($1.98B), Non-Knit Men's Suits ($1.62B), Non-Retail Pure Cotton Yarn ($1.25B), and Heavy Pure Woven Cotton ($989M). The most common destination for the exports of Pakistan are United States ($3.52B), China ($1.95B), Germany ($1.78B), Afghanistan ($1.67B), and United Kingdom ($1.62B). Exports,-#permalink to section&text=During the last five reported,Pure Woven Cotton ($989M).

Saeed said...

Prices of every thing has been increased many folds. People r in real trouble. The increase in exports not helping to reduce unemployment

Riaz Haq said...

Saeed: "Prices of every thing has been increased many folds. People r in real trouble. The increase in exports not helping to reduce unemployment"

Flat exports, soaring imports, excessive #debt in PMLN years created yet another balance of payments crisis forcing yet another IMF bailout in Pakistan’s history. This inevitably led to massive currency devaluation, double digit inflation, slow growth

Ahmed said...

Dear Sir,

Thank you for sharing such informative and good news ,mashallah it is nice to see that Pakistan is heading in the right direction and we must pray for this.

Sir, how much has the foreign exchange reserves increased in Pakistan since PTI came into government?

I was having a debate with a friend,he said that the foreign exchange reserves of Pakistan are only US$ 19 billion.Do you really think this is enough?


samir sardana said...

Pakistan has demonstrated the resilience of its supply chain and manufacturing excellence. Manufacturing is OBSOLETE,in the EU.

The biggest risk to the global supply chains,is NOT WAR.A N-war will be in a over in a week, at the maximum and may not impact,the global supply chain - even in those 7 days.

The Risk to the global supply chain is Pandemics - and there is a progression,on the way. The prime target of the epidemics,will be in Northern Hemisphere and East Asia,and Parts of Africa.

EU and American will have to relocate their manufacturing and supply chain,from their nations,to derisk the epidemic and business ris.

If you look at all the nations in the world,with a population of 100 million or more,only 3 nations have a lower COVID rate per capita of population.They are Japan,Ethiopia and PRC.None of the 3 nations can compete with Pakistan on manufacturing cost,and Japan and Ethiopia,have supply chain risks - in pandemics and war.

Therefore,there is no competition for Pakistan,in the COVID scenario.

The way ahead for the EU and US companies,is to make in Pakistan,and export duty free to USA and EU (as a part of LDC benefits) and the US/EU companies are to focus on branding, marketing and research in the US/EU.

That is the future.dindooohindoo

Pakistan has to form a manufacturing quad of Pakistan,PRC,Turkey and Africa - with fungible capacities - financed and researched by China,staffed by Pakistan,Manufactured by Pakistan and Africa and Marketed by Turkey and Pakistan.

The chance of a pandemic striking all the coordinates of the quad is NIL.Disruptions in Malacca and South China Sea and the Persian Gulf,will have no impact on the Pakistani supply chain (although it may impact the African supply chain)

Since it is a super profit business,there will be no funding constraints.US and EU VCs and PE funds will fund the businesses and cash out on the KSE.

Once the US/EU companies come into Pakistan,the same or other investors,will look at investing for the domestic market of Pakistan.and other export markets.

That is the Osmotic effect of Pandemic induced manufacturing locations.

samir sardana said...

2 Things more for Pakistan to do in this Pandemic

Build the soft infrastructure - as in,Hospitals and Health care centres,School and Colleges and Mass Low Cost Housing AND extend the cotton value chain to obviate the Cotton exports,as far as possible.

Investments in Hospitals and Health care centres,will insulate the Pakistani people from pandemics,and can also bring in medical tourism,,rom the GCC and North Africa.

If any Arab lands in India for medical tourism - he might be better off in Pakistan.Indian Doctors are experts in Gau Mutram,Gajah Mutram and Gadha Mutram - like the Hindoo Trinity ! dindooohindoo

Education is key to keep the pipeline of supply of workers to industry,always choked - so that there is a supply pressure,and wages rise is checked,and Pakistan retains its cost efficiency.As time passes,the benefits of lower oil prices on IPP tarriffs,will transfer to industry.

Mass Low cost Housing at say 1750 USD house financed on 20 year loans from WB/IMF/OECF loans,with a 9-15 USD per month EMI is the solution to poverty.1 member of the family of the owner of the house has to be GUARANTEED employment on a daily or monthly basis,to pay off the EMI.

Then we come to Cotton.With LDC benefits,Low wages,Nil Labour regulations,SEZs,Minimal lock in for Capital and Dividend Repatriation and Levelised power tarriff at par with ASEAN,and a fiscal levy which is lower than any ASEAN nation - there is no reason for the Cotton value chain NOT to relocate to Pakistan.It will also yield higher returns for farmers.

There is a pipeline of pendemics coming - human and THEN,plant based.Pakistan has the right location,the right DNA and genes of its population,optimal interbreeding of races and the RIGHT SIZE of the population.

Riaz Haq said...

#Pakistan's Trade deficit contracts 22.6% in October 2020. #Exports increased 2.1% to $2,066 million as compared to $2,024 million in October 2019. Imports declined 10.3% from $4,074 million in October 2019 to $3,653 million in October 2020. via @Profitpk

A meeting of the Ministry of Commerce was held on Tuesday under the chairmanship of Advisor to Prime Minister on Commerce and Investment Abdul Razak Dawood to review the country import-export trends.

The meeting was informed that as per the provisional trade data for the month of October 2020, the country’s exports increased 2.1pc to $2,066 million as compared to $2,024 million in October 2019. On the import side, the country witnessed a contraction of 10.3pc, as imports fell from $4,074 million in October 2019 to $3,653 million in October 2020.

Based on the import-export data, Pakistan’s trade deficit shrank 22.6pc ($1,587 million) in October 2020, showing an improvement of $463 million over the same month of last year.

The adviser was briefed that during the July-October FY21 period, exports decreased marginally by 0.1pc. The exports during this period stood at $7,540 million as compared to $7,547 million in July-Oct FY20.

During the period under review, the country’s balance of trade declined 4.5pc to $7,424, as compared to $7,776 million last year.

The advisor expressed satisfaction at the export trends and praised Pakistani exporters for bringing the exports back to pre-Covid levels despite uncertainty and contraction in the country’s major markets.

Meanwhile, the meeting was also briefed on the trends of major exportable products. It was informed that during July-October FY21, an increase in export volume was witnessed mostly in the value added sectors. These included home textiles (10.0pc), women garments (20.8pc), jerseys & pullovers (35.3pc), made-up articles of textile (10.4pc), stockings & socks (19.2pc), cement (10.8pc), pharmaceutics (26.8pc), tarpaulins (66.8pc), and made-up clothing accessories (245.2pc).

On the other hand, exports in the non-value added sectors recorded a decrease during July-October FY21; cotton fabric (-8.0pc), cotton yarn (-40.1pc), worn clothing (-63.6pc), raw leather (-38.4pc), crude petroleum (-53.7pc), and cotton (-95.7pc).

The meeting was further briefed on the geographical spread and growth of exports. As compared to the same period last year, Pakistan’s top five growing markets during July-October FY21 remained Indonesia (39.3pc), Qatar (34.5pc), Denmark (24.9pc), S Korea (22.5pc) and Afghanistan (15.6pc).

The advisor hoped that Pakistan’s economy would continue with its upward recovery trend and directed the ministry officials to proactively facilitate exporters and businessmen. “No stone be left unturned to counter the effect of the second wave of Covid-19 in the country’s major markets.”


I am glad to note that our exports of Telecommunication & IT Services have done very well during the period Jul-Sep of this Financial Year (FY). The exports have grown by 41% to USD 444 million as compared to USD 315 million in the corresponding period in the last FY.

Riaz Haq said...

#Hemp’s moment is within reach as respected alternative to #cotton in #Pakistan-made fabric & apparel . It provides a greater yield for farmers, reduces amount of water needed to grow, and it offers the wearer UV protection & natural antimicrobial benefits

Panelists at a Kingpins24 panel on Thursday theorized why it’s taken so long for the fiber to catch on throughout the industry—and much of it boils down to legalities.

“Different countries have different rules and regulations,” said Zishan Ahmed, deputy general manager, product development, Naveena Denim. “In Pakistan, our government has approved some legislation on it, so ultimately we will have a bigger crop size in the coming days.”

The Pakistan government recently announced plans to allow the industrial production of hemp, which will initially be controlled by the government and eventually open up to private businesses and farmers. According to the Jakarta Post, Pakistan’s science and technology minister Fawad Chaudhry estimated the legislation could provide the country with $1 billion over the course of the next three years.

And many could benefit from hemp-based products. Experts explained that the fiber has a number of benefits on both the consumer and the supply chain sides: It provides a greater yield for farmers and reduces the amount of water needed to grow, and it offers the wearer UV protection and natural antimicrobial benefits.

But one of the greatest benefits according to Junaid Safdar, R&D director of Siddiqsons, is that it would lessen the industry’s dependency on cotton.

“We need an alternate solution to cotton right now because water reserves are decreasing everywhere around the world, and cotton’s yield is not so great,” he said. “Hemp has a very good yield compared to cotton, and it has all of its same features.”

He noted that advancements in cottonized hemp have made the fibers comparable in nearly every aspect, with hemp leading the charge in benefits.

Johan Van den Heede, marketing director of Raymond Uco, added that its ability to blend with organic fibers is a key advantage that can take the material from summer to winter.

“Playing with the construction and with the blends, you can make beautiful products out of hemp,” he said. “It’s a bit more authentic—it gives you a more rustic feeling.”

Despite hemp’s benefits, it will take a while for the industry to drive down the cost and make it more accessible to the consumer. According to Safdar, it all boils down to supply and demand.

“Technically it should be cheaper, but it’s just a matter of time because of the demand supply,” he said. “It’s still very early stage. I think that as the time passes, it will eventually become the same price as cotton or maybe even cheaper.”

Riaz Haq said...

Denim Mills Play Up Offerings with Comfort and Antimicrobial Properties
Long before the COVID-19 pandemic forced the world into isolation, consumers were clamoring for denim that was sustainable, comfortable and antimicrobial. Now, those needs have been underscored, as people are spending more time inside and prioritizing quality over quantity.
Denim mills have created innovative fabrics that embody all of these properties. In separate presentations at the Kingpins24 online event, Artistic Milliners and US Denim highlighted some of their featured fabrics.

Artistic Milliners presented its Bio Vision 2.0 collection that is based on guidelines set by the Ellen MacArthur Foundation’s Jeans Redesign, featuring biodegradable fibers that provide optimal recovery. The mill’s circular focus is also displayed in its Circular Blue New collection, which is made of 100 percent recycled cotton and uses post-consumer, pre-consumer and industrial waste.

US Denim’s latest collections also focus on sustainability and feature recycled and biodegradable fibers. Its Reborn product is “sustainable from every angle” and uses recycled cotton, elastane and polyester; aniline-free dyestuff; and water-safe dyeing methods.

The Pakistan-based fabric mill also highlighted its use of cottonized hemp, which checks off multiple boxes for consumers, as the fiber is both sustainable and naturally antimicrobial. Its IntelliJeans collection features hemp sourced from China that is free of pesticides and uses 86 percent less water than conventional products.

Artistic Milliners offers a similar take on antimicrobial denim with its hemp-based Buttery Soft 2.0 collection. Made with water-saving dyeing techniques, denim in this collection provides the comfort of sweatpants with the look of an authentic jean. And while most jeans lose their softness over time, this denim was specially designed to get softer with every wash.

Riaz Haq said...

Hemp Clothing Is Happening, and No, It Won’t Get You High
Once sullied by its associations with seedy drug culture, the irreproachable hemp plant is gaining ground in summer fabrics that rival wrinkly linen

MORE THAN JUST A WEED Hemp Jacket, $129,; Glanshirt Shirt, $355,; Hemp Pants, $406,; Boots, $130,

More Than Just A Weed Hemp Jacket, $129, Patagonia.Com; Glanshirt Shirt, $355, Slowear.Com; Hemp Pants, $406, Phipps.International; Boots, $130, Clarksusa.Com.
LAST YEAR Senate Majority Leader Mitch McConnell signed his name on the 2018 Farm Bill using a pen made of hemp. Among other initiatives, the bill removed hemp from the Controlled Substances list, where it had languished since 1970. To address the elephant in the article: Hemp is not marijuana, its THC-potent sibling. It’s a perfectly respectable (read: non-high inducing) plant that produces fibers for textiles, plastics, paper and a host of other products. The passing of the Farm Bill is the surest sign yet that hemp has shed its headshop connotations and entered the mainstream. Included in that transformation is its legitimacy as a valid, even desirable, fabric for modern clothing.

According to many designers and fans, hemp is an eco-friendly alternative to cotton, requiring less water to produce and regenerating at a far more rapid rate. It is also a suitable summer-weight substitute for wrinkle-prone linen. “Everyone walks up to it and is like, ‘Oh my God, this is linen,’” said Ally Ferguson, the owner of Seeker, a 2-year-old hemp-based label in Los Angeles. Her brand’s lightweight trousers and jackets (made from imported hemp) have a clean, almost Scandinavian aesthetic, one that calls to mind a minimal urban coffee shop, not Woodstock. “When people look at it they’re like, ‘It’s not really hippie or crunchy. That’s super clean and I want to wear that.’”

‘As evidenced by its nautical uses, hemp is impressively durable.’
As evidenced by its nautical uses since at least the Viking era, hemp is impressively durable. Companies like Patagonia and Levi’s are exploiting this quality by fashioning the material into hardy work trousers and jeans. “It was the original sail cloth, so it’s really resistant to ripping and pulling,” said Antonio Ciongoli, the designer of 18 East, a New York label that made all of its lightweight summer sweaters from Italian hemp this year. He also focused on hemp because it doesn’t crumple like linen, the more common choice for an airy knit. “The fibers are really strong,” noted Mr. Ciongoli. You can stuff a hemp sweater in your suitcase or wear it on a hot day without being subjected to unsightly puckering.

Though it has clear aesthetic and ecological advantages, hemp fiber is not readily available on a large scale here in America. Jeffrey Silberman, a professor and chairperson of textile development at the Fashion Institute of Technology in New York, stated that it takes a specific type of processing equipment to turn hemp into a fiber, and that type of machinery is still scarce. “New York state doesn’t have the processing equipment for it, at least as far as I can tell. I haven’t found a spinning mill that can handle hemp,” he said. Nonetheless, universities in New York and North Carolina are working on America’s hemp development, and Mr. Silberman predicts that hemp’s rehabbed reputation will make it a closet staple soon enough. “It’s not scratchy anymore and it’s not based on a five pointed leaf,” he said. “It’s based on its being a real fiber that can make a real fabric.”

Riaz Haq said...

#China signs contracts to buy commodities from 15 countries including #Pakistan. Planned imports include #grain, #fruit, #textiles and #chemicals.

“SDIC will continue to deepen cooperation in important fields and key industries with partners both at home and abroad, so as to share opportunities brought by the CIIE, go hand in hand and contribute to the promotion of global economic development and regional economic and trade exchanges,” he added.

Meanwhile, the first batch of cherries is expected to be exported from Pakistan to China next year, said Li Wei, business representative of Huazhilong International Trading Private Ltd. Pakistan.

“Pakistani cherries are really good, including sweetness and quality. China can provide technical assistance to manage orchards, while Pakistan can provide workers, so that both sides can achieve win-win cooperation,” he said in an interview with the CEN at the third China International Import Expo (CIIE) being held in east China’s Shanghai.

Previously, media reported that export of Pakistani cherries has been hindered by cold chain management, market information system, packaging and processing facilities.

Li Wei said that to tackle the problem of cherry fruit fly, 60-70 degree hot water bath treatment and the following cold storage is a solution. Now as cold chain technology lags behind in Pakistan, we will develop it and strive to solve it next year.

Referring to why he embarked on export business of agricultural products from Pakistan, Li Wei said the general manager of the company visited Pakistan by chance and found that there was a great business opportunity for the export of agricultural products from Pakistan to China.

Therefore, in the second half of 2018, 24 tons of mango were exported from Pakistan to China and sold out in Xinfadi, a large wholesale market of fruits, vegetables, and meat for Beijing. “It was the first to enter Beijing by air cargo transport from Lahore.” This year, the company was officially registered in Pakistan.

According to Li Wei, Pakistani mango is comparable to those from Australia and the Philippines. Although the price is more expensive than domestic mango, Pakistani mango is better in terms of variety, appearance, quality, among others. The sugar content of ripe mango can reach 22.68%. “It tastes best at 75% – 80% maturity,” he added.

There is seasonal difference in the marketing of Pakistani mango in China. “The mango season in Pakistan starts from August 20 to November 20, while there are almost no mangoes in southern China in November. Pakistani mango can extend the mango season by two months compared with Chinese mango. It has a time advantage,” Li Wei explained.

The mango orchard adopts the cooperation mode between China and Pakistan. “Chinese side provides technology and sends technical staff in fields of inorganic fertilizer, bagging, picking, disinfection, transportation, while Pakistani side provides labor. Finally, through cross-border e-commerce air transportation, Chinese customers can eat fresh mango within a week after placing an order,” he added.

If the pandemic improves next year, China will import large quantities of Pakistani mangoes. On the development of high value-added mango products, he said that in the next step, they may cooperate with domestic snack manufacturers to produce dried mango products.

Regarding the other potential agricultural products in Pakistan, Li Jinhuan, Executive Director of Huazhilong International Trading Private Ltd. Pakistan, said that besides mango, the company also exports other Pakistani agricultural products such as cotton, Morchella, rice and corn. “We have received orders for Morchella from China before. Similar to fungus, Morchella is also a kind of medicinal material. It is scarce in China, with large demand and high price. Although the Morchella output in Pakistan is low and it’s difficult to buy, the price is much lower than that in China,” Li Jinhuan added.

Riaz Haq said...

#Car sales in #Pakistan rose 25% to 11,997 units in October 2020, from 9,566 units in October 2019. Sales of #motorcycles and 3-wheelers jumped from 156,872 units in Oct 2019 to 175,294 units in Oct 2020, up 11.7%. #AutomotiveIndustry #manufacturing #LSM

Car sales in Pakistan rose 25 per cent to 11,997 units in October 2020, as against the sale of 9,566 units in October 2019, according to data released by the Pakistan Automotive Manufacturing Association (PAMA) on Wednesday.

Cumulatively, the sale of cars increased 8pc YoY to 43,865 units during the first four months (July-Oct) of the current fiscal year (2020-21), as against 40,583 units in same period of last year.

As per the data, the sale of Honda cars (Civic and City) increased sharply by 80pc, from 1,032 units in October 2019 to 1,858 units. The sale of Toyota Corolla, however, registered a decrease of 33pc, from 1,982 units to 1,314 units in Oct 2020.

During the month under review, the sale of Suzuki Swift increased 19pc to 180 units (151 units in Oct 2019), while that of Suzuki Wagon-R surged 70pc to 1,198 units (530 units in Oct last year).

On the other hand, the sale of Suzuki Alto plummeted to 2,893 units in Oct 2020 from 4,048 units last year, showing a decline of 48.5pc. The sale of Suzuki Cultus also declined by 30pc to 816 units in Oct 2020 from 1,179 units in Oct last year.

The newly launched Toyota Yaris witnessed a sale of 3,058 units in Oct 2020 as compared to the sale of 2,421 units in September 2020, showing an increase of 26.3pc on a monthly basis.

Meanwhile, the sale of motorcycles and three-wheelers jumped from 156,872 units in Oct 2019 to 175,294 units in Oct 2020, showing a rise of 11.7pc.

Riaz Haq said...

#Pakistan #textile hub #Faisalabad to utilise all 80,000 power looms. “Pakistan has seen orders shifting from multiple nations including #China , #India & #Bangladesh ..#Garment manufacturers are operating near maximum capacity” unable to take more orders

Faisalabad is currently experiencing a financial boom with the operationalisation of 50,000 power looms and expecting the opening of another 30,000 units.

Known as the country’s textile hub, Faisalabad, for the first time after 1990, has seen a massive economic growth following a high demand of export items and the government’s recently announced incentive of supplying electricity to the industrial sector at reduced rates.

In this regard, Prime Minister (PM) Imran Khan in a tweet on Thursday shared a television news report about the increased economic activity in Faisalabad and the resultant shortage of 0.2 million labourers required to meet the high demand of orders in the textile sector.

Factories and power looms faced closures owing to a power crisis as emerged due to the apathy of previous governments in the recent past. However, during the coronavirus situation, orders in the textile sector were diverted towards Pakistan from various countries.

The news report mentioned that Faisalabad had 1.3 million workers with one million natives and 0.3 million belonging to other districts.

Bloomberg in its recent report ‘Opening early helped Pakistan boost exports during pandemic’ also mentioned a surge in Pakistan’s textile exports.

“Pakistan has seen orders shifting from multiple nations including China, India and Bangladesh,” All Pakistan Textile Mills Association (APTMA) Secretary General Shahid Sattar said, as quoted by Bloomberg.

“Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months,” he added.

Further, Pakistan’s decision to loosen pandemic restrictions early has helped the nation’s exports emerge stronger than its South Asian peers.

Bloomberg said that Pakistan’s outbound shipments grew at a faster pace than Bangladesh and India as textiles, which account for half of the total export.

“Islamabad saw total shipments grow 7pc in September, compared with New Delhi’s 6pc and Dhaka’s 3.5pc,” it said.

Riaz Haq said...

Recent data suggest a further strengthening and broadening of the recovery observed since July, led by construction and manufacturing. Sales of Fast Moving Consumer Goods (FMCGs) rebounded in FY21 Q1, average sales volumes of POL and automobiles have surpassed their pre-Covid levels of FY20, and cement sales are at an all-time high.

Large scale manufacturing (LSM) continues to rebound, expanding by 4.8 percent (y/y) in FY21 Q1, against a contraction of 5.5 percent in the same quarter last year. Nine out of fifteen major manufacturing sectors have shown gains, including textiles, food and beverages, petroleum products, paper and board, pharmaceuticals, chemicals, cement, fertilizer, and rubber products. The MPC noted that the recovery was being supported by stimulus provided by the government, the round of policy rate cuts and the SBP’s timely measures to mitigate the impact of the COVID pandemic.

These measures included principal extension and loan restructuring, payroll financing, and Temporary Economic Refinance Facility (TERF) which injected liquidity, reduced layoffs and provided incentives for investment. In agriculture, the impact of the expected decline in cotton production is likely to be offset by growth in other major crops and higher wheat production due to the rise in support prices and recently announced subsidies on fertilizers and pesticides. While social distancing continues to weigh more heavily on certain parts of the services sector, wholesale and retail trade and transportation are expected to benefit from the knock-on impacts of the ongoing pick-up in construction, manufacturing and agriculture.

External sector

The external sector continues to strengthen, with the current account in FY 21 Q1 recording the first quarterly surplus in more than five years. After remaining in positive territory for all four months of this fiscal year, the cumulative current account through October reached a surplus of $1.2 billion against a deficit of $1.4 billion in the same period last year. This turnaround was supported by an improvement in the trade balance and record remittances.

As per SBP, exports have recovered to their pre-COVID monthly level of around $2 billion in September and October, with the strongest recovery in textiles, rice, cement, chemicals, and pharmaceuticals.

Remittances recorded strong growth of 26.5 percent (y/y) during July-October, primarily due to orderly exchange rate conditions, supportive policy measures taken by the government and SBP, travel restrictions, and increased use of formal channels. Meanwhile, subdued domestic demand and low global oil prices have kept imports in check.

The sizable current account surplus and improving outlook and sentiment for the economy have supported a 3½ percent appreciation in the PKR since the last MPC and further strengthened external buffers, with SBP’s foreign exchange reserves increasing to $12.9 billion, their highest level since February 2018.

Based on the performance to date, the outlook for the external sector has improved further and the current account deficit for FY21 is now projected to be below 2 percent of GDP.

Fiscal sector

In line with this year’s budget, the government continues to make concerted efforts to maintain fiscal discipline, including adhering to its commitment of no fresh borrowing from SBP. Despite lower non-tax revenue, the primary balance posted a surplus of 0.6 percent of GDP in FY21 Q1, similar to the levels achieved during the same period last year. However, the higher overall budget deficit due to larger domestic interest payments should taper as the benefits of recent interest rate cuts filter through. PSDP-releases, which are an important stimulant of economic activity, recorded an increase of 12.8 percent (y/y) during the first four months of this year.