Pakistan is likely to fix the export target for the next financial year at around $25 billion under the forthcoming ‘Trade Policy 2011-2012’ but the current pace of export growth is likely to peter out according to experts.
Though the country’s exports may cross the record figure of $25 billion this year, the government is reluctant to fix the target at more than $25 billion for the next financial year but even this seems highly optimistic. There is a decline expected in the price of commodities in international markets which would certainly affect the value of goods exported from Pakistan, experts told Pakistan Today.
The current historic jump in export values, it is widely believed is predicated on an overall increase in international commodity price, especially those of textile products.
The current volume of exports could well prove to be a bubble as it was mainly concentrated in the textile sector and its enhanced value in international markets while production capacity only improved marginally. “It will be very hard for Pakistani textile exporters to even maintain the current level of exports which has so far been achieved”, experts noted.
“The government is also conscious of the situation as it has already indicated in the Budget 2011-12 that it will be a great achievement if the ramped up export level recorded this year is maintained,” they said, adding that the situation will be altered by the arrival of fresh cotton crop in the international market. The shortage of cotton production globally has been an important contributory factor in the prices of textile products which certainly helped Pakistan to realise an unexpected export boom.
Presenting the example of Bangladesh, they said “ Dhaka, which was registering exports worth $15 to $16 billion during the last few years has also achieved over $20 billion in value of exports during the last 11 months, because of the price hike of garments and other textile products in particularly the European market”.
They said, the ministry of commerce, while framing the Trade Policy 2011-2012, needed to examine the international trend of prices especially of textile products which shares the major part of the country’s export. According to sources, the ministry was currently trying to frame a reasonable trade policy which would be announced soon as the Federal Budget 2011-2012 has been approved. The government was likely to make several amendments in the existing Trade Policy 2009-2012. According to the three years trade policy under the Strategic Trade Policy Framework (STPF), the ministry had proposed at least six per cent for the fiscal year 2009-10 and 10 and 13 per cent for each of the successive years.
It is worth mentioning here that the country has almost achieved over $22 billion in exports during July 2010 to May 2011 while the total export value by the end of the current fiscal year is expected to be around $25 billion. Although besides the textile sector, food, cement and other sectors have also shown growth in the concluding financial year, the main driver of the recorded export drive was the textile industry.
