EXPORTS FROM PAKISTAN

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Mar
29 - Apr 4, 2010

The exports of goods and services play the important role in the economic development of Pakistan and signify for the country one of the most imperative sources of foreign exchange income.

Exports not only ease the pressure on the balance of payments but also create employment opportunities. They can increase intra-industry trade, help the country to integrate in the world economy and reduce the impact of external shocks on the domestic economy.

Pakistan exports rice, furniture, cotton fiber, cement, tiles, marble, textiles, clothing, leather goods, sports goods, surgical instruments, electrical appliances, software, carpets, and rugs, ice cream, livestock meat, chicken, powdered milk, wheat, seafood, vegetables, processed food items. In addition to this, it exports automobiles to Afghanistan and other countries, defense equipment (submarines, tanks, radars), salt, marble, onyx, engineering goods, and many other items. Pakistan is very well recognized for producing and exporting cements in Asia and Mid-East.

CURRENT SITUATION

COMMODITIES

%CHANGE FOR VALUE IN MILLION RUPEES IN FEB, 2010 OVER JAN, 2010

. JAN, 2010 FEB, 2009
Cotton cloth -4.83 35.80
Rice others -12.39 158.55
Bed wear -14.21 13.12
Knitwear -11.74 16.22
Readymade garments -17.49 21.93
Cotton yarn -32.12 14.50
Rice basmati -9.58 -1.58
Towels -19.37 27.82
Made up articles -5.19 62.91
Art, silk & synthetic 0.86 65.47

Exports from Pakistan during February 2010 amounted to Rs130,740 million, as per provisional data, as against Rs143,694 million in January 2010 and Rs99,279 million during February 2009 showing a decrease of 9.01 per cent over January 2010 but an increase of 31.69 per cent over February 2009. In terms of US dollars the exports decreased by 9.42 per cent in February 2010 to $1,539,945,000 (provisional) when compared with January 2010 $1,700,150,000 but increased by 23.24 per cent as compared to February 2009 $1,249,596,000.

Exports during July-Feb 2009-2010 stood at Rs1,035,081 million as against Rs931,218 million during the corresponding period of last year showing an increase of 11.15 per cent. In terms of US dollars the exports during July-Feb 2009-2010 amounted $12,397,196,000 as against $12,070,006,000 during the corresponding period of last year showing an increase of 2.71 per cent.

Main exported commodities during February 2010 were cotton cloth (Rs12,397 million), rice (Rs11,578 million), bed wear (Rs10,487 million), knitwear (Rs.10,362 million), readymade garments (Rs9,267 million), cotton yarn (Rs7,335 million), rice basmati (Rs5,925 million), towels (Rs4,305 million), made up articles (excl. towels, bed wear) (Rs4,146 million), and art, silk and synthetic textile (Rs3,867 million).

ISSUES IN EXPORTS

Exports sector of Pakistan is beleaguered with many problems such as high cost of production and energy shortage. Other players in the South Asia have succeeded in creating a niche in the international markets by exporting quality products, augmenting textile exports and earning rich dividends due to surge in the export of their cotton products. Traditionally, over 60 countries dominated the exports of garments to the west. After the expiry of the quota regime on January 1st, 2005, the exports of several dozen of them witnessed a decline.

Since last few years, the exporters of Pakistan are facing serious power crisis in the industrial areas, which cause million of rupees losses to every year. Especially energy outages during the peak season of textiles (Dec to July) rendered the manufacturers severe monetary losses.

The countryís energy demand is growing at an annual consumption growth rate of 4.8 per cent. Therefore, there is a dire need to have a sustainable growth of 7 to 8 per cent in the energy supply along with infrastructure developments to support the steady growth in the country's GDP.

CUMULATIVE EXPORTS BY MAJOR COUNTRIES
(% SHARE IN WORLD EXPORTS)

COUNTRIES JUL-SEP-2009 JUL-SEP-2008
USA 18.95 18.76
UAE 10.25 9.14
Afghanistan 7.96 7.91
China 5.97 4.05
UK 5.78 4.85
Germany 3.80 3.96
Spain 2.36 1.98
Saudi Arabia 2.20 2.24
France 1.78 1.68
Hong Kong 1.78 2.24
India 1.36 3.11
Iran 1.22 2.46

Pakistan's share in the world exports is negligible and inconsiderable because of its thin basket of exporting products and limited numbers of exporting destinations. Pakistan exports are concentrated in a few categories such as cotton and synthetic textiles, leather, rice and sports goods and they collectively account for around 72 per cent of total exports from the country. In terms of markets, traditionally Pakistan exports 50 per cent of its products to only seven countries namely USA, Germany, China, UK, Hong Kong, UAE, and Saudi Arabia. Various trade policies in the country consistently tried to promote diversification on both counts through a variety of measures.

CONCLUSION

Pakistan enjoys competitive advantage in several products which are fast growing in the global markets and have high demand potential. Pakistan will and should remain engaged in the low-skill, labour intensive dynamic products such as textiles, leather products etc. In order to increase its share in the global exports, the government officials and business community should participate in trade fairs frequently organized in different foreign countries.