Textile exports slow down further in July 2022
News: Textile exports for July witnessed slowdown as exports for ready made garments declined by ~ 5% MoM (0.6% YoY) and exports for cotton yarn and fabrics declined by 29% YoY. Significantly higher cotton prices and slowdown in key exports market such as US and Europe have impacted trajectory for textile exporters.
Views: Among categories, cotton yarn and home textile segment is the worst impacted as its monthly run-rate has declined by ~ 27% to US$ 0.9 billion from March 2022 levels (US$ 1.3 billion). Also, exports for RMG are down 17% at US$ 1.4 billion after registering an all-time high of US$ 1.6 billion in March, 2022. Major global retailer’s are grappling with excess inventory issues owing to lower-than-expected demand and delayed deliveries due to port congestion. This has led to slackening of tempo of order flows to sourcing partners. Recent correction in cotton prices (~25% from all-time highs) augurs well for entire textile value chain but near term challenges could lead to volatility in revenue and earnings trajectory.