Despite all hue and cries over increase in cotton and
cotton yarn prices within the local market, the overall performance of
the textile exports are encouraging and likely to hit the mark of $8
billion at the end of the current financial year in June this year.
Pakistan's volume of textile exports remained
hovering around $5 billion for many years which became a psychological
barrier in the textile industry. For the first time, the textile
industry managed to break the psychological barrier by adding around $2
billion dollars in the year 2002-03 by reaching around $7 billion.
Although some quarters were expressing concerns that the industry may
not be able to retain its last years performance because of different
reasons including reported shortfall in the cotton crop, increasing
international and local prices of cotton yarn and to some extent change
behavior of the European Union towards Pakistani products. Despite all
these concerns, it is estimated that the textile industry continued to
march towards a new height and is expected to register an increase of 37
percent over the total exports of previous year, it is learnt.
The increase in cost of production because of
increasing cotton and cotton yarn prices were overcome by increase in
the unit prices as the exports got at least 10 percent increase in their
unit prices which help not only in off setting the increase in cost of
production but also helped overall increase in terms of value.
A certain group of critics in the textile business,
however, expressed their concerns that the honey moon of the textile
industry is likely to over next year with the abolition of quota regime
from January next when opening of the doors under WTO regime would lead
to tremendous competition among the textile producing countries.
As far as Pakistan's textile industry was concerned,
so far only 10 percent top textile exporters were prepared for the World
Trade Organization regime, said Tariq Ikram, Minister of State and the
Chairman of Export Promotion Bureau (EPB) at a conference recently.
On the part of the government, the EPB Chairman said,
it has already covered almost all the required areas to facilitate the
trade under WTO regime. There would require no reduction in customs duty
for the WTO as the government had already reduced it to a level where
only rationalization would be required. Unlike other countries in the
region including India and China, there is no issue of subsidies in
Pakistan and most of the subsidies have already been withdrawn in almost
all the economic areas of the country, hence no major change is required
on the regulator side by the government.
It is now qualitative competitiveness of the products
which would help the exporters to remain in the export business.
Despite all these claims by the Chairman EPB, the
government has yet to play a much bigger role especially in providing
even play field to the export-oriented industry. So far, the industry in
Pakistan was managing to compete in the international market mainly
under cover of the quota protection.
Besides quality of the product, the price of the
product would play a key role in finding a play in the world market. To
bring down the price level, the industry would be in need of inputs at
affordable price such as electricity which is highly sold at the highest
rates in the region. In certain export oriented industries, the
electricity is used as the basic raw material, there is no second
opinion that with the current level of electricity price, it would be
hoping against the hope to grab the market share by producing goods at
such a higher rate of electricity. Hence the first and the foremost
requirement would be to bring down electricity prices at least to the
level of other countries in the region. In fact the price of electricity
is higher because the government has started using the utility companies
as revenue collecting agencies. Certain government levies would have to
be withdrawn if the government really desires to give relief to the end
users and to keep up the pace of economic growth in the country.
The EPB Chairman has, however, suggested to the
textile industry especially to the garment manufacturers to shift from
the men's garments to those of women and children. Broadly speaking, the
EPB Chief has right pointed out for a change in production range, yet
the most important thing to meet the two ends is to make efforts to go
enhance the volume of production at a massive scale to reach at economy
of the scale. It is the massive scale of production which really proves
cost effective and face the competition in terms of price of the unit.
Another important area is the concentrate on value addition through
match the demand in fashion designing. The Export Promotion Bureau has
already launch a scheme for hiring world class consultants for improving
production, marketing and also to acquiring brand names of international
repute. It is certainly a right approach and if the local industry
succeeded in acquire some popular brand names, the textile industry in
Pakistan could enhance its export to a much greater height in the days