A growth of 24.64 per cent was witnessed in export proceeds this year in the first eight months (July-Feb) as these stood at $15.334 billion against $12.303 billion last year. - File Photo

ISLAMABAD: The trade deficit of the country decelerated by 9.23 per cent in February over the same month last year owing to unprecedented increase in volume of exports and fall in imports. The balance of trade narrowed to $895 million in February from $986 million last year as imports became costlier on the back of devaluation of rupee, coupled with overall decline in demand for imports, suggested data of Federal Bureau of Statistics released here on Thursday.

Exports surged by 42.07 per cent in February to $2.158 billion as against $1.519 billion over the same month last year.

A growth of 24.64 per cent was witnessed in export proceeds this year in the first eight months (July-Feb) as these stood at $15.334 billion against $12.303 billion last year.

Commerce secretary Zaffar Mehmood told Dawn that robust growth in exports was reported on the back of consistent efforts of exporters despite increase in energy prices and floods devastation.

He said that increase in commodity prices, especially cotton prices in the international market, also pushes up overall volume of exports from the country.

This increase in raw material prices would be reflective in export of end products in the month ahead, he added.

Asked whether there would be any decrease in cotton prices, the secretary said it would rather go up as many countries were diverting to cultivation of such crops which could produce bio-fuels to tame rising fuel prices.

Another factor, according to Mr Mehmood, was export of agriculture products, which also grabbed maximum share in the non-textile products.

He said rice exports are expected to reach $2.3 billion this year from $1 billion exports a few years ago. Rice exports would register further increase next year following recovery of fields devastated by floods, he added. The government has projected export proceeds to reach $22 billion by the end of June 2011.

Exports target has been estimated at $19.9 billion for the whole year 2010-11 as against $19.2 billion last year, an increase of only $700 million.

Imports recorded a growth of 21.88 per cent at $3.053 billion in February as against $2.505 billion over the corresponding month of last year.

However, over-all volume of imports witnessed a growth of 17.32 per cent in July-February period this year as these reached $25.599 billion as against $21.820 billion over the same months last year.

For the first eight months of the current fiscal year, trade deficit witnessed a growth of 7.86 per cent in July-February period as it stood at $10.265 billion against $9.517 billion over the corresponding period of last year.

The government had projected imports bill to reach $31.7 billion during 2010-11, an increase of six per cent from $ 29.9 billion last year.

Analysts said import bill is likely to go up following spiking oil prices in international market. The government would also import food products to bridge the shortfall in certain crops this year. As a result, the over-all import bill would increase at the end of June.