Exports may not reach the traditional mark of $5
billion this year
Jan-14 - 20, 2002
The textile industry, which is the mainstay of
Pakistan's economy, is passing through difficult times due to
uncertainty prevailing in the buyers market in the aftermath of
September 11 incident especially in the United States.
Nadeem Maqbool, Chairman, All Pakistan Textile
Mills Association (APTMA) told PAGE that inventories of the
textile mills are piling up due to lack of fresh export orders. So far
the industry was engaged in meeting the export orders already in the
pipeline of the last year. There is a marked decline in fresh orders,
which is the main cause of concern for the textile sector. Decline in
the knitwear, yarn and gray cloth is noticeable and calls for
immediate solution, he said.
Commenting on the EU package of incentives given to
Pakistan, he said it would certainly result in enhancing exports from
Pakistan. However it would be too early to comment on its total impact
on our exports.
He appreciated that EU has waived duty across the
board on Pakistan products except 5 items including yarn, Gray cloth,
leather and leather products etc. Since these items are already much
in demand duty will remain on these items, that however rest of the
items and categories have been exempted from duty. Similarly 15 per
cent increase in quota and enhanced accessibility will also help
boosting the exports in the long run.
He however said that the textile industry is
eagerly awaiting the incentive package from United States, which is
the major buyer of Pakistani textiles. He expressed the hope that as a
result of negotiations going on between Pakistan and the United
States, a comprehensive package will certainly be announced by the
United States to offset the adverse impact the industry is facing
after September 11.
Nadeem Maqbool said that textile industry was well
equipped to meet the future challenges. Under the on going
balancing-modernization-replacement (BMR) process the textile industry
has spent $500-600 million during last two years.
The APTMA chairman said that use of man-made fiber
is increasing tremendously all over the world, but unfortunately it
did not take place in Pakistan due to undue protection being given to
5 polyester fiber producing units. He said that even after payment of
25 per cent duty, the imported polyester fiber is cheaper than the
locally produced polyester fiber. He strongly recommended that any
sort of favour or consideration go against the principle of economics.
If Pakistan textile industry was allowed to increase use of polyester
fiber at least by 50 per cent, the industry will not only produce the
export surplus but also certainly earn the precious foreign exchange
for the country.
He said that nature was kind enough to Pakistan
which is self-sufficient and producing enough cotton to meet the
requirement of the industry. He however regretted that the involvement
of the public sector in the cotton sector on the basis of help out the
growers is one of the major causes of disturbance in smooth running of
the textile affairs in Pakistan.
He said that the government for procurement of
cotton has authorized Trading Corporation of Pakistan. He said that
TCP lifting cotton at the support price but selling it in the export
market at a much cheaper price. By doing this TCP is strengthening the
hands of our competitors consequently adversely affecting the
export-oriented units in Pakistan. He said that textile sector is
willing to buy the entire lot of cotton stock held by TCP at
international price provided TCP floats tenders for the sale of
cotton. He strongly recommended that as far as fixation of cotton
price is concerned, let the market forces prevail to determine the
prices. He disagreed that the involvement of TCP helps the growers for
a better return. He said that entire benefit never goes to the
growers, a considerable portion of benefits given by the government
goes into the pocket of the middlemen. He was of the view that if the
involvement of the public sector was eliminated in the cotton affairs,
the textile industry was capable enough to fulfil the needs of the
growers in the country.
Meanwhile, in order to ascertain the actual impact
on the textile and other exporting sector, the economic division of
the US mission in Pakistan is conducting a survey. It is however
feared that the way our industry is being run and in the absence of a
proper data base actual impact on our external trade may not be
Keeping in view the difficulties faced by the
United States in granting concessions to Pakistan in textiles exports,
both countries have started deliberations on a revised trade package
Following discussion between Commerce Minister
Abdul Razak Dawood and Pakistan's envoy to the US, Dr. Maleeha Lodhi,
Secretary Commerce Mirza Qamar Beg air-dashed to Washington recently.
Pakistan was now asking the United States that the
trade package be announced as early as possible so that Pakistan's
textile export could pick up momentum.
The long awaited revised trade package has been
prepared in consultation with Export Promotion Bureau and textile
entrepreneurs, who had visited the US with the commerce minister.
Textile sector in Pakistan is pinning hopes to have
a good trade package to accelerate pace of exports from Pakistan,
currently on the decline.