Pakistan first half export review

During the first six months of the current fiscal year, Pakistan  recorded over a 20 per cent decline in exports. However, the sector is hopeful for increased volumes for the remainder of the year and trade to Afghanistan is forecast to reach new heights.

During the first six months (July-December 2011) of the current financial year Pakistan exported 3.662Mt of cement and earned US$214.617m compared to 4.611Mt at US$226.983m in the corresponding period. This shows that cement exports fell by 20.60 and 5.45 per cent YoY in terms of quantity and dollar valu respectively, according to data released by Pakistan’s Federal Bureau of Statistics.

However, in terms of Pakistani currency, exports declined 3.86 per cent during July-December due to a 20 per cent depreciation of the Pakistan rupee against the US dollar.

The average export cement price increased to US$58.6/t from US$49.21/t in 6MFY10-11, translating to a growth of 19.08 per cent.
 
Afghanistan was the largest importer of Pakistani cement at 2.5Mt (up 10 per cent) followed by India, which imported 350,059t reflecting a growth of over 60 per cent. However, on negative note, Pakistan cement exports to rest of world  continued to drop over the same period last year.
 
Out of total exports (3.662Mt) Pakistan’s biggest cement exporter, Lucky Cement, sold 1.19Mt. Its main export markets include the Middle East, Afghanistan, Africa and India.

During December alone, Pakistan exported 493,600t of cement and earned US$27.625m compared to 286,522t at US$25.077m in November 2011. This reflects sequential MoM growth of 72.27 per cent and 10.16 per cent in terms of quantity and value in dollars. However a fall of 22.48 per cent and 14.05 per cent was noted compared to December 2010 data of 636,775t cement at US$32.36m.

The local cement industry is expecting good exports during remaining months of FY2011-12. It forecasts that exports to Afghanistan will achieve a new level of 5Mt during the current fiscal as 10 per cent growth was witnessed during the first half. Cement exports to regional countries like Sri Lanka, Iraq and India as well as to various African countries are expected to continue the momentum witnessed during the first half of this financial year.

While reviewing first half exports, the Karachi based research house InvestCap, observed that despite the slow recovery in local dispatches, export demand remained on the sidelines due to lower development activities amid capacity expansion in some Middle Eastern countries.