Pakistan exports continue to fall in first quarter

Pakistan cement exports continued to fall in the first quarter of FY14-15, largely due to declining shipments to its biggest market of Afghanistan.

Export volumes in the July-September 2014 period fell by 3.85 per cent to 2.436Mt while revenues were down 3.22 per cent to US$ 142.77m. In terms of the Pakistan rupee, revenues also showed a 5.38 per cent drop to PKR14.36bn.

On a slightly more positive note, the average export price of cement inched ahead by 0.58 per cent YoY to US$58.59/t.

Month-on-month data also shows a negative trend as the country exported 899,343t of cement and earned US$52.52m in September 2014 alone, compared to 984,039 at US$57.64m during the month before. This reflects a fall of 8.61 per cent and 8.88 per cent in terms of quantity and value in dollar respectively. However, on an annual comparative basis, September volumes and revenues rose by 2.85 per cent and 2.36 per cent respectively, compared to September 2013.

The breakdown of the export shows that Afghanistan imported 835,457t via land, down 28.60 per cent in July-Sept 2014. Exports to India, on the other hand, rose by 80.7 per cent (189,564t). Sales to other Pakistan export markets rose by seven per cent.

A report of JS Research says the declining trend that prevailed through the first quarter is mainly due to lower demand from Afghanistan as the withdrawal of NATO forces slowed the construction activity. In the Pakistan’s northern region which borders Afghanistan, exports were down 17.3 per cent YoY. However, exports via the sea route remained strong (+10 per cent YoY in 1QFY15) as cement manufacturers continue to penetrate African markets.

With demand in Afghanistan expected to stay weak, the research house expects the negative trend to continue going forward, forecasting a six per cent decline in Pakistan exports during FY15.