THE EXPORT POTENTIAL
Pakistan's exports to 10 leading destinations increased by over one billion dollars
From Khalid Butt, Lahore
Oct 03 - 09, 2005
Though the total exports of Pakistan stood at $14.40 billion in fiscal year 2004-05, yet 63 per cent exports were confined to only 10 countries, which calls for accelerating efforts to target potential buyers and new markets especially in the face of free market access around the globe.
It is worth mentioning that Pakistan's exports to 10 countries exceeded nine billion dollars mark for the first time and settled at 9.11 billion dollars in last financial year that means the remaining $5 billion export earnings were fetched from rest of the countries.
The country-wise exports details gathered by PAGE revealed that the United Kingdom, United Arab Emirates, Afghanistan, Germany, Italy, France, Saudi Arabia, Spain and Belgium were the top 10 export destinations of Pakistan in 2004-05.
In the last fiscal, Pakistan's exports to 10 leading destinations increased by over one billion dollars when compared to the preceding fiscal year. In 2003-04 the country's exports to 10 leading trade partners were less than 8 billion dollars.
Among the top 10 countries, Pakistan's exports to the United States, UK, Afghanistan, Italy, Belgium and France witnessed a substantial growth in last financial year vis-a-vis the preceding fiscal year.
For the first time in 2004-05 the exports of Pakistan to the United States crossed three billion dollars and settled at 3.154 billion dollars, showing an impressive increase of 391 million dollars when compared to 2.763 billion dollars exports in 2003-04.
Similarly, exports to the United Kingdom also surpassed one billion dollars, reaching at 1.035 billion in last fiscal as against 0.893 billion dollars in the preceding fiscal, showing 142 million dollars increase during the comparative period.
Exports to land-locked and war-ravaged Afghanistan depicted the highest growth of over 80 per cent and amounted to 732.18 million dollars in 2004-05, 329.05 million dollars higher when matched with 403.15 million dollars in 2003-04.
The country's exports to the United Arab Emirates stood at 969 million dollars, 48 million dollars more when compared to 921 million dollars exports in 2003-04.
Exports to Germany amounted to 665 million dollars, Italy 538.58 million dollars, France 399.59 million dollars, Saudi Arabia 359.49 million dollars, and exports to Spain amounted to 322.91 million dollars in last financial year.
It was learnt that the textile products have fetched a lion's share of foreign exchange through exports to major trade partners in last financial year. In 2004-05 the textile exports fetched around 8.50 billion dollars.
Rice, leather, leather products, carpets, sports, surgical equipment, engineering goods, cement and petroleum products also fetched a substantial amount of over two billion dollars in last fiscal year.
In last fiscal, the exports showed an encouraging growth of over two billion dollars in comparison with 2003-04, when exports settled at 12.30 billion dollars.
PROSPECTS OF COTTON CROP
Conflicting news about the size of the cotton crop in Pakistan are so far reaching in from different quarters. While the government, as per its past track record, presents a different forecast every week, vacillating between one extreme of registering a record yield to matching last year's output only to be even falling short due to adverse weather conditions, whereas the private pundits remain uncertain this year in their crop estimates.
The general consensus, however, is that 14-15 million bales happen to be the likely achievable figure, in spite of a particular segment of farmers still expecting an even higher crop size this season as compared to the one (15 million bales) received last year. An important group of cotton farmers (from the viewpoint of size of area under cotton cultivation), however, is extremely up beat, saying that in this season they have so far used only one frequency of insecticide and pesticide spray.
This is also due to the present recurrence of the monsoon activity in the country, otherwise the nature through its favourable wind directions and suitable temperature conditions was taking care of the pest attacks - something which augurs very well for the quality of the crop as well.
Regardless of what the final tally comes out to be, one thing is certain that the demand for cotton this year in Pakistan and in the world stands increased. With continuous capacity expansion by the Pakistani mills over the last four years and the dominance of China, the overall cotton requirements from a downward trend in the late 90s are now witnessing an increasing graph in recent years. Reduced prices of the end products due to fierce competition in the non-quota regime and an unprecedented hike in the oil prices have also added to the shift to cotton and cotton rich goods from those made from polyester and other artificial fibers.
World cotton production soared by 2.5 million tons in 2004-05 to reach a high figure of 26.2 million tons, while consumption reached a record 23.4 million tons. With production slightly outpacing consumption, world-ending stocks rose to an estimated 10.50 million by July 31, 2005, still significantly short of the cozy requirement of having at least 12 months consumption as a buffer.
The net imports by China (Mainland) are projected to more than double in 2005-06. The projection seems even more probable as the international prices in the first half of 2005 remained about 25 per cent lower than what they were in the previous year, which makes imports more attractive. Advances in technology, including biotechnology, are contributing to increasing the yields and reducing the production costs.
COTTON IMPORT FIGURES:
Importing Years (Begin. Aug. 1)
Weather in 2005-06 seems to be the only concern especially in the Northern Hemisphere. Due to this the world average yield is expected to fall from a record of 732 kg per hectare in 2004-05 to 689 kg per hectare this season. This may cause the world cotton production to drop by 2.10 million tons against last year and put an inflationary pressure on the international cotton price.
The developing countries now account for most of the increase in world cotton consumption at the end-use level. Although the cotton consumption in the rest of the world is expected to drop this year, the increase in cotton consumption in South Asia and China will more than offset this decline - global consumption in 2005-06 is expected to increase by approximately 600,000 tons.
The Chinese textile industry will continue to serve as the locomotive for world mill use and given the rising consumption in South Asia it would be prudent for Pakistani spinners to secure their 2005-06 requirements as early as possible in the current season.