EXPORTS FROM PAKISTAN

S KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
May 17 - 23, 2010

Exports are a vehicle of economic growth and development. They generate foreign exchange for the country. Exports lead to national self-reliance and reduce dependence on external assistance which howsoever liberal may not be available without strings.

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, assembled cars, tractors, two- and three-wheelers, defense equipments, salt, engineering goods, and many other items.

PAKISTAN'S MAJOR EXPORTS IN VALUE

ITEMS %CHANGE FOR VALUE IN MILLION
RUPEES IN
MARCH, 2010 OVER
  FEB, 2010 MARCH, 2009
Rice others 25.91 181.92
Cotton cloth 10.56 14.86
Bed wear 15.75 12.97
Knitwear 11.22 25.74
Readymade garments 4.34 22.27
Cotton yarn 23.29 23.54
Rice basmati 18.97 40.00
Petroleum products (excl top Naphta) 11.84 100.04
Towels 18.84 32.16
Petroleum top Naphta 43.66 139.27

9MFY10 EXPORTS

In terms of US dollars the exports during July-March, 2009-10 totaled $14.2 billion (provisional) as against $13.4 billion during the corresponding period of last year showing an increase of 5.83 per cent.

Exports during July-March 2009-10 totaled Rs1,183,991 million (provisional) as against Rs1,036,466 million during the corresponding period of last year showing an increase of 14.23 per cent.

PAKISTAN'S EXPORTS (MILLION DOLLAR)

MONTHS 2007-08 2008-09 2009-10
TARGET EXPORT
July 1,472 1,879 1,646 1,468
August 1,465 1,564 1,587 1,462
September 1,484 1,772 1,637 1,508
October 1,378 1,475 1,443 1,577
November 1,539 1,527 1,557 1,518
December 1,320 1,257 1,435 1,581
January 1,464 1,346 1,398 1,700
February 1,538 1,250 1,423 1,540
March 1,772 1,313 1,616 1,807
Total 13,432 13,383 13,742 14,162

Pakistan's trade deficit has been recorded at $10.920 billion in the first nine months (July to March) of the ongoing fiscal year 2009-10 as compared to $12.741 billion in the same period of last fiscal year, indicating a decline of 14.29 per cent. Main commodities of exports during March, 2010 were rice (Rs14,578 million), cotton cloth (Rs13,706 million), bed wear (Rs12,139 million), knitwear (Rs11,525 million), readymade garments (Rs9,669 million), cotton yarn (Rs9,043 million), rice basmati (Rs7,049 million), petroleum products (excl top Naphta) (Rs5,319 million), towels (Rs5,116 million) and petroleum top Naphta (Rs4,551 million).

Total exports from Pakistan during March, 2010 amounted to Rs152,451 million (provisional) as against Rs130,740 million (provisional) in February, 2010 and Rs105,249 million during March, 2009 showing an increase of 16.61 per cent over February, 2010 and of 44.85 per cent over March, 2009. In terms of US dollars the exports increased by 17.37 per cent in March, 2010 to $1.8 billion (provisional) compared with February, 2010 $1.5 billion (provisional) and by 37.78 per cent as compared to March, 2009 $1.3 billion.

LACKING DIVERSIFICATION IN EXPORTS

Lack of diversification in exportable goods is hampering the growth of exports from the country. Exporting products are restricted to alone five items namely cotton manufactures, leather, rice, synthetic textile and sports goods. These five categories account for 73.5 per cent of total exports during July-March 2008-09. Within these few items cotton manufactures remained major contributor in total exports.

However, this concentration is changing with the passage of time. For example, the share of non-conventional items in total exports was 17.4 per cent in 2002-03 which surged to 26.5 per cent during July-March 2008-09. The rice and cotton manufactures contributed 11.3 per cent and 53.3 per cent in total exports respectively during July-March 2008-09. The share of rice increased from 7.4 per cent in last year and cotton manufacturers decreased from 57.5 per cent last year.

The country's export of textile manufactures was going through the process of transformation towards higher value addition as the share of high value added products was rising gradually in the export basket. The high value added items like knitwear, bed wear and towels had increased their shares in export basket from 14.6 per cent to 18.3 per cent, 15.9 per cent to 17.5 per cent and 4.6 per cent to 6.5 per cent, respectively since 2001-02. However, this transformation is now slowing evident from the fact that the cotton cloth had 20.7 per cent share in the total textile manufactures exports during July-March 2008-09. On the other side the share of value added goods increased to 42.3 per cent in total textile manufacture exports during July-March 2008-09 as against 41.7 per cent in the comparable period last year.

CONCLUSION

Pakistan enjoys competitive advantage in several products demands of which are fast growing in the global markets. However, Pakistan's export development strategy should be based on the need to increase both the volume and value of exports through product diversification and value addition.