Exports from Pakistan during 7MFY19 improve

Exports from Pakistan during 7MFY19 improve
19 February 2019


The Pakistan cement industry is facing a domestic drop in cement demand, but export data for 7MFY19 show overseas sales have been strong. Experts believe that with domestic demand experiencing a dip, cement manufacturers have been selling off their surplus inventory to regional markets perhaps with a cut to their margins.
 
Pakistan's cement industry received foreign exchange revenue of US$27.34m by exporting 655,317t of cement during the month of January 2019, compared to US$25.89m at 624,714t in the previous month and US$17.88m from 357,371t during January, 2018. This shows an increase of 5.6 per cent and 52.9 per cent in terms of value on MoM and YoY basis, respectively, according to the Pakistan Bureau of Statistics.
 
In terms of quantity, the exports saw a growth of 4.9 per cent in January 2019 on MoM and 83.4 per cent over January 2018 YoY basis during this period.
 
However, on cumulative basis, in the first seven months of FY18-19, export revenue rose 35.1 per cent to US$184.34m with Pakistan exporting 4.32Mt of cement, compared to US$136.47m from 2.718Mt in 7M2017/18 (July 2017-January 2018). In terms of Pakistani rupees, the growth stood at 66 per cent.
 
The breakdown of exports, according to All Pakistan Cement Manufacturers Association (APCMA), shows that export dispatches to Afghanistan and India continued to decline in the 7MFY18-19. Exports to Afghanistan fell by 21.7 per cent to 1.02Mt and volumes to India were down 4.6 per cent to 648,108t. However, seaborne exports increased by over 57.8 per cent to reach 1.201Mt of cement and 100 per cent 1.264Mt of clinker during this period.
 
Export to Afghanistan
According to experts and local media, it is also unfortunate that markets like Afghanistan, which took up more than 50 per cent share of Pakistan's cement exports, are no longer as welcoming. In 7MFY19 they fell by 22 per cent YoY. That market is not only being flooded with more affordable Iranian cement, other regional players have also been eyeing it. Some may attribute the frequent closures at the borders and political tensions between the two countries to be a driving factor into Pakistan losing its market share, but the issue is more an economic one with other cement entering the market at a lower price. In addition, Afghanistan is finally diversifying its trade relations as well.
 
Port facility
However, the south is still performing better than the north in terms of exports. Southern players enjoy the advantage of proximity to the port which provides better export options (in terms of costs) as compared to cement producers in the north.

Published under Cement News

Tagged Under: Pakistan Exports Trade Afghanistan