Some economists believe that an overall increase in the country’s export, triggered by a 30 percent rise in the textile export in the current financial year, may turn out to be an ‘export bubble’. They argue that this export growth has neither improved our GDP nor has it given rise to new investments and job opportunities in the country. It is, thereby, feared that this export bubble may fizzle out.
A research shows that GDP has grown by only 0.6 per cent in the first seven months of the current fiscal year. In contrast, exports have increased by 47 percent in the first eight months of the same period. Qualitatively, yarn production has increased by a meager 1.5 percent, whereas its export jumped by 20.7 percent ($956 million). In addition, exports of knitwear, bed linen, readymade garments, cotton and towels which increased by 32.71, 22.28, 37.75, 22.4 and 17.25 percent respectively did not drive a significant rise in production.
A comprehensive study reveals that two million cotton bales were lost as a result of the recent floods. Woes piled as curtailed cotton supply in the international market fuelled a massive increase in cotton prices. Consequently, finished textile products made from this expensive cotton fetched high prices in the international market, which swelled the export bill. However, at present, foreign buyers are not willing to pay such a high price which has halted the market, resulting in a gradual fall in prices.
Total exports reached $17.8 billion in July to March, compared with $14billion in the last fiscal year. Statistics show that import of textile machinery also increased by 80 percent in the first nine months of the current fiscal year. Profits of textile companies and its demand in the international market have substantially increased in the last two years. The ‘8th Textile Asia 2011’ was held recently. It was attended by 259 foreign delegates. In addition, 122 exhibitors from 40 countries displayed 357 international renowned brands of textile machinery. TDAP CEO and a number of foreign diplomats present on the occasion felt that the exhibition had been highly successful. A visit of all stalls depicted the confidence on Pakistan’s textile industry as all were certain about growth potentials of our textile sector. Almost all textile companies of Pakistan were keen in buying the latest textile machinery. E-commerce Gateway, organiser of this exhibition, deserve commendation for putting up such a grand show.
Pakistan is the second, third and fourth biggest producer of cotton yarn, fabric and cotton respectively. Pakistani yarn and fabric contribute around 30 percent and eight percent to the total international market. Pakistan is among the top 10 textile exporters in the world. Textile export stands at over $400 billion; out of which China tops the list with present export of $55billion, followed by Hong Kong $38billion, Korea $35billion, Taiwan $16 billion and Indonesia, India, Bangladesh and Pakistan $11billion.
An exclusive exhibition of Pakistani textile products namely fabric, garments, home textile, hosiery, towels, and technical textile is organised regularly. Organiser of Textile Asia has announced Clothing, Fabric & Textile Asia 2012, an international exhibition of Pakistani textile products to be held from 7 to 9 April, 2012 at Expo Centre Karachi. More than 300 Pakistani companies are expected to showcase their textile products to international buyers representing renowned textile brands. I have requested Head of US Trade Representatives (USTR) Gail Strickler to persuade all big American brands and stores like Jordache, Kohl, South Pole, Levi’s, VF, Wall Mart, K Mart, Jesse Penney and Target to attend this exhibition. Gail has already introduced over 90 American top brand buyers to Pakistani exporters in the TexWorld Exhibition, held in New York last year.
It is important to realise that Pakistan’s product and market base for export is too small and we depend on a few countries. Now is the time to look for new export markets of our products. Central Asian Countries and Africa have great potential, but Pakistan has not tapped this potential.
It is encouraging that on the invitation of the President of Tajikistan, TDAP in collaboration with FPCCI are taking a delegation constituting 100 businessmen to Dushanbe from May 20 to June 3, 2011. Immense mutual trade potential in textile, leather, food stuff, sport goods, oil and gas, in addition to various other sectors exists in Central Asian countries.
Cotton and yarn prices have already dwindled by 30 to 35 percent in the international markets, resulting in an exports crash. Improved production is, hence, imperative to have an exportable surplus and to sustain the export growth.
