PAKISTAN'S EXTERNAL TRADE
The government seems to be in the right direction for export diversification.
From SHAMIM AHMED RIZVI,
Jan 20 - 26, 2003
There are strong indications that the export target of $10.5 billion for the current fiscal year will be easily met as the figures for the first six months (July-December, 2002) indicate that exports have exceeded by $5.2 billion showing an increase of about 18 per cent over the corresponding period last year.
During the first four months of the current fiscal (July-October, 2002) the increase registered over the corresponding four months last year was about 15 per cent. Commenting on the performance of the first four months the then Commerce Minister had expressed confidence that as a result of engineering vision and Defence Products Export Organisation set up by the government, the exports would rise by at least 25 per cent during the current financial year and the export target for the current year would be surpassed.
Export of manufactured goods surged by nearly 16.30 per cent to $1.71 billion during the period July-December, 2002, over the corresponding period of previous year, according to foreign trade figures released by the Federal Bureau of Statistics here.
A noteworthy aspect of exports is 16.40% rise in exports of textile manufacturers, which totalled $ 3.31 billion. Their contribution to total exports, nevertheless, dropped by 0.10% to 63.76% during the period under review. But as a constituent of manufactured exports, their share improved somewhat to 70.28%, up 0.16% form the previous year.
Within the textile manufactured group, the cotton yarn exports went up 2.69% totalling 270,918 tons. But in terms of value, foreign exchange intake declined by 0.15% in dollars and by 6.28% in Pakistani rupee.
An increase of 12.47% is, however, reported in exports of cotton cloth (991.618 thousand square meter). In terms of value, however, this item fetched $627.16 million, that is 20.08% more than during the same period of previous year. But cotton yarn and cotton cloth are intermediate goods. Taken together, these accounted for 33.018% of total textile manufactured exports as against 35.24% during the first half of 2002-03.
By implication, the exports of finished textile products were on upward swing. This is true, particularly in respect of knitwear, bedwear, towels and art. Silk & synthetic textile whose exports (quantity-wise) soared by 32.99%, 32.31%, 9.27% and 7.55% respectively. In value, the amounts that accrued to foreign exchange earnings of Pakistan were $544.09 million, $576.66 million, $146.77 million and $243.35 million, respectively.
However, tents, canvas, and tarpaulin, a traditional export group registered 0.62% decline (quantity-wise). The unexpected development, nevertheless, is a substantial drop in export of ready made garments (12.85%). In spite of this, their export earnings ($522.04 million) increased by 20.48% over the previous year, indicating higher unit price fetched by these.
Another value-added item—made up article (including other textiles)—registered 3.64% drop in its export earnings ($164.83 million).
Other manufactures: This category constitutes a vagary of an era when the rupee is on the upswing against US dollar. Its export proceeds totalled $969.29 million. This shows 6.09% growth over the corresponding period of previous year in dollars. In rupee, however, (Rs.57.29 billion), it registered a loss of 0.12%.
Tanned leather and leather manufactures ($110.79 million and $210.76 million, respectively) accounted for 33.18% of the contribution of other manufactures, down from 36.75% of previous year.
Exports of sports goods surged by 12.76%. This was due to miscellaneous items only, because the exports of footballs and gloves declined by 7.19% and 3.59% respectively.
Chemicals and pharmaceutical products group with exports worth $115.87 million, surged ahead with a growth rate of over 75%. Times are not favourable to other traditional exports, e.g. carpets, surgical goods and medical instruments and milasses which declined (in dollars) by 9.34%, 1.21% and 43.49%, respectively.
The others category recorded a 45.58% spurt. With exports totalling $428.86 million, their share in total exports jumped from 6.59% to 8.25%.
Primary commodities: Their exports totalled $485.5 million 20.11% more than last year. Despite quantitiative decline of 15.44% rice scored an increase of 3.15 in dollars. The quantity of rice exported during the period under review was 720,563 tons.
The country also exported 31,896 tons of raw cotton. The figures show a decline in unit price to a significant extent $768 per ton as against previous year's $880 per ton.
Pakistan also exported 674,766 tons of wheat during the 6 months period under review which also saw significant decline in exports of fisheries, fruits and vegetables.
For the first time in decades the government seems to be in the right direction for export diversification.
According to the Finance Minister, the country imported textile machinery worth one billion dollars during the last two years, which is reflective of balancing and modernization efforts going on in the sector and hopefully expansion of the capacity would lead towards more exports. However, no genuine breakthrough in exports is possible without diversification of our export base and production.