PAKISTAN: Share of textile exports shrinks to 55% from 60%

As the overall export volume remained stagnant in the first seven months of the current financial year, the shrinking share of textile goods in exports has been adversely impacting the export sector. During July-January 2009-10, total exports came to $10.870 billion as against $10.820 billion in the corresponding period of last year. In the months under review, textile export proceeds totalled to $5.981 billion over $5.849 billion in the same months of previous year.

Government claims to diversify the export base by focusing on the sectors other than the traditional ones, however the figures available on the exports tell a different story. "No new product or new market has significantly contributed to the exports and it is the same old and traditional items that have been making the total export volume," according to textile exporters.

Textile products remained the mainstay of the country's export sector over the years and being the largest industrial and export-oriented sector, it caters to the employment of a major part of industrial labour of the country.

Textile exporters said that the most worrisome factor is the stagnant export of textile goods and whatever is being exported in this category largely comprises of raw cotton, cotton yarn and low valued textile goods.

The value-added sector, they pointed out is under intense pressure due to a host of domestic and international issues, which have been making the country's products uncompetitive in the foreign markets from its international competitors.

The prolonged power outage, gas shortage, high financing cost and infrastructure problems are some of the major issues, which have been hampering the growth of the value-added textile sector.

Also, the high tariffs on the textile goods in EU and US markets have given leverage to its competitors like Bangladesh and Vietnam to kick out Pakistani products from these lucrative and high-priced markets.

"It will be a wishful thinking to increase the export of value-added sector in the present situation when even raw materials are not available in adequate quantity to run the industrial units in this sector," a value-added textile exporter felt.

He noted that revival of textile sector is not possible without the growth in value-added sector because it is the one, which would fetch better prices of cotton instead of raw cotton and cotton yarn, which is presently being exported in huge quantity.

"The share of textile products in the total exports could only be achieved through focus on the value-added textile chain and if remedial steps are taken, the textile's share jumping to 60 percent is not a hard target to achieve," he added.