An analysis of fiscal 2007-08 textiles, apparel exports
Analysis by Tariq Ikram
ARTICLE (April 07 2008): This is a sector and country wise export analysis based on provisional figures July-December 2007. The purpose is to provide our exporters and policy formulators a factual awareness of where the problems and opportunities lie, related to products and countries and therefore assist, specially the private sector in planning their sectoral and geographic export efforts.
SOME OF THE THOUGHTS THAT SHOULD CROSS THE EXPORT ENTERPRISES ARE:
a) Are their existing markets or those of their interest, on the increase or decrease. If on the increase they should attempt to understand why buyers in that country are wanting to buy from Pakistan and use their arguments to convince existing or new customers to enhance orders.
b) If their exports are declining but the Pakistan's export to the same country are growing they need to discuss with customers what can they do better giving examples of over all export growing from Pakistan. Develop a sense of partnership with buyers to assist each other.
c) Also in case of (b) above exporters should review their vendor management and again in a spirit of partnership with their vendors to improve their product quality and meet deadlines.
d) If exporters are not exporting to countries where their product sectors are growing they should try to establish new customers.
e) Where markets are showing high percentage growth rates it means something is going in right direction for Pakistan. This is an opportunity to consider market diversification; equally if an exporter is absent from a market and the growth rate is significant, such markets offer opportunity for growth.
The above are some strategic marketing initiatives but exporters must carefully analyse their own position and take appropriate action. TDAP is here to help and stimulate the thinking process. It may be noted that in this analysis major focus is behind the increases and decreases in exports and the absolute value of exports is only mentioned where required to contextualize the analysis.
Detailed statistics and graphs reflecting current position and trends are available on the TDAP Website (Welcome to Trade Development Authority of Pakistan), under "Export Statistics".
TOTAL TEXTILES AND APPAREL (T&A):
Textile and Apparel as defined by TDAP, for purposes of this analysis, includes all products starting from raw cotton and ending up with even cotton waste inclusive of tents and canvas. It, of course, includes products made from cotton and manmade yarn and fiber.
Total T&A exports for six months ending December 2007 were US $5.2 billion. These were US $280 million less than last year ie 5%. Of the total exports of US $5.2 billion, countries where exports increased accounted for US $2.7 billion ie almost half. The balance exports of US $2.5 were from countries where exports declined.
All countries where exports were higher, produced a combined increase of US $128 million. Those countries which reflected a decline generated a total decrease of US $408 million resulting in the net decline of US $280 million. On a total T&A basis, the countries generating the major part of the above increases of US $128 million were Italy US $20 million, Turkey US $30 million, Netherlands US $18 million and a host of non traditional markets ("others") that jointly produced increase of US $21 million. It is noteworthy that the non-traditional markets generated US $21 million out of the total increase of US $128 million. This reflects the efforts being made by the exporters, supported by TDAP, to venture into new markets. Of the decline in exports of US $408 million, the major countries pulling down Pakistan's exports were USA US $311 million, Hong Kong US $49 million, Saudi Arabia US $12 million and China US $10 million.
It is however, noteworthy that on a total T&A basis, an actual decline over last year was seen only in a total of nine countries. In all other countries, exports were either equal or higher than last year. However the largest declines in the US, China, Canada and Hong Kong could not be made up by the growth in the rest of the world.
This clearly reflects that Pakistan is not competitive and serious attention needs to be paid to this primarily by the government (for short term support) and the private sector (for both short and long term). Whether we like it or not the fact is that today Pakistan's GDP growth, export levels, trade deficit, foreign exchange reserves, local investment in (trail-blazer for FDI), employment generation, revenue generation welfare of the farming community, welfare of the women employed in the rural areas and indeed the overall national economic activity are all seriously dependant upon the textile and garment sector. A lot has been done to address the issues and leverage the opportunities but a lot more is required. Question is not 'whether Pakistan can afford to, the question is 'whether Pakistan can afford not to'!
There is no doubt that during 1999 to 2005 when exports of T&A were growing at a fast pace (8 years increase of over US $5 billion!) and returning revenue and cash flows to the government and the industry, fundamental issues could not be completely addressed.
These are need for increase in cotton production, minimising cotton contamination, improved growing capacity and technology, standardisation of cotton, new cotton seed development through research, incentives etc to the value added sectors, increase in scale of production in garments, training of human resource, use of ICT in industry, JVs and FDI for technology, marketing and better management. Today, with earnings not increasing and government revenues under pressure to invest further behind these, albeit essential, feels painful to both the government and the private sector.
The above analysis is for all textiles and apparel. Within this large export sector there are various product groups such as cotton, yarn, fabric, garments, bed ware, towels etc. The export increases and decreases by country, in each of these country and product groups are significantly different. The analysis that follows is therefore product group wise.
RAW COTTON:
Exports for six months ending December 2007, were a total of only US $20 million. These were US $4 million lower than last year ie 18%. Exports made were primarily to China of US $2 million, Myanmar US $0.7 million, Bangladesh US $7.5 million, Indonesia US $5 million. It may be noted that exports to China and Myanmar (last year were virtually nil) and that exports declined to Bangladesh and Indonesia by 19% and 41% respectively.
COTTON YARN:
Total exports for six months ending December 2007 were US $673.5 million ie 7.8% of Pakistan's total exports. Compared to last year these were US $28.2 million or 4.0% lower.
Exports increased over last year to Turkey US $28.8 million or 151%, Bahrain US $8.0 million or 382%, Portugal US $6.2 million or 17.6%, Bangladesh US $4.6 million ie 13%, Netherlands US $4 million ie 225%, Germany US $2.2 million or 161%, Belgium US $2.1 million or 67%, Vietnam US $2.0 million or 75%, Philippines US $1.7 million or 62%, UAE US $1.5 million or 62%.
However, decreases outweighed the increases and export over last year declined in USA US $24.4 million or 52%, Hong Kong US $24 million or 12.5%, China US $11.9 million or 7.6%, South Korea US $6.3 million or 13.6%, Japan US $3.5 million or 12.9%, Egypt US $2.5 or 24%, Indonesia US $3.7 million or 40%, Brazil US $2.7 million or 61%, Austria US $2.7 million or 99.9%. Net of the increasing and decreasing countries, total exports were US $28.2 million or 4% lower than.
Nil exports compared to last year were made to Yemen, Iraq, Kuwait, Russia, Denmark, North Korea, Sweden, Ireland, Qatar, Norway and a few other countries.
YARN OTHER THAN COTTON YARN:
The product range included here is cotton yarn mixed with manmade fibre and filament yarn etc. Total exports were US $25.5 million which were US $7.1 million lower than last year ie a decline of 21.9%.
Significant increases in value were achieved in Turkey US $1.6 million or 91%, South Korea US $1.3 million or 223%, Brazil US $787K (Nil last year), Bangladesh US $676K ie 39%, Sri Lanka US $552K or 90%. Other countries where exports also increased by US $l00K to US $150K were Portugal, Philippines, Argentina and Kenya.
In terms of trends, significant percentage increases were achieved in Argentina (5600%), Australia 1666%, Hungary 4100%, Denmark 1600%, Morocco 49%.
Significant decline in exports was experienced in India US $3.2 million or 100%, Hong Kong US $1.5 million ie 66%, China US $1.3 million ie 79%, Iran US $829K ie 74%, Bahrain US $698K or 87%, Italy US $667K or 65%, Egypt US$479 ie 7 1%, Germany US $436K or 83%. Other countries of a decline between US $100 to US $315K were Afghanistan, Canada, Austria, Belgium, Japan, Saudi Arabia, UK, Mauritius, and France. It is noteworthy that in all countries where exports declined, the percentage declines were high which suggests sudden decline in demand. Besides countries to which zero exports could be made compared to last year were Austria, Malaysia, Russia, Myanmar, Algeria, Thailand, Poland, Oman, Azerbaijan, Czech Republic, Qatar, Switzerland, Greece, Jordan, New Zealand, Romania and few others. Exports to these countries last year were small but nil exports suddenly to a large number of countries is note worthy.
COTTON FABRIC:
This included fabric greige and dyed finished but made of cotton only. Does not include made up items of fabric such as bed sheets, etc. Total exports were US $905 million which was a decline of US $89 million over last year or 9%.
Countries where significant growth in export value was achieved were (and note the high percentage increase in some cases), Italy US $7.9 million ie 14%, Russia US $6 million ie 42%, Brazil US $4.4 million ie 120%, Ukraine US $4.4 million ie 144%, Belgium US $3.7 million ie 14%, Spain US $2.8 million ie 9%, Romania US $2.6 million ie 247%, Netherlands US $2.4 million ie 16%, Finland US $2.2 million ie 46%, countries with increases of US $1 to US $2 million were Portugal, Egypt, Mexico, France, Estonia, Bahrain, Latvia and Azerbaijan.
Countries reflecting significant percentage increase trends were Russia 42%, Brazil 120%, Ukraine 143%, Finland 46%, Bahrain 51%, Romania 247%, Lebanon 50%, Latvia 369%, Czech Republic 121%, Azerbaijan 1838%, Afghanistan 508%. Against nil exports last year, exports were achieved in Myanmar, Maldives and Uzbekistan this year.
Countries where export declined were significant were US $35.4 million ie 36%, Hong Kong US $21.5 million ie 42%, UAE US $12.8 million or 40%, Sri Lanka US $9.7 million or 18%, South Africa US $7.3 million ie 26%, UK US $7.0 million ie 22%, India US $6.8 million or 23%, Saudi Arabia US $4 million ie 29%, Indonesia US $3.6 million ie 64%, Canada US $3.4 million ie 46%; other relatively significant countries where exports declined by between US $1 million to US $3 million were Turkey, Australia, Jordan, Japan, Norway, Niger, Philippines, Qatar, Nigeria and Iraq.
KNITTED CROCHETED FABRICS:
Products included are all kinds of knitted fabric but not made ups of knitted material. Exports at US $32.8 million were US $2.8 million more than last year or 9%. Significant countries remaining lower than last year were the USA US $2.2 million ie 50%, UAE US $2.1 million or 48% and Jordan US $1.0 million or 45%.
Significant increases in countries that more than offset the decreases were achieved in Sri Lanka US $2.3 million ie 72% and India US $1.0 million ie 320%.
READYMADE GARMENTS:
Products included here are all kinds of readymade garments made from woven material for men, boys, girls, ladies but do not include garments made from knitted material (such as housing, T-shirts etc). Garments made from cloth made of manmade fiber are also included here.
Exports at US $714 million were 8.2% of total exports of Pakistan (last year 9.6%). Exports declined over last year by US $93.5 million or 11.6%.
The significant markets where exports increased were Spain US $2.0 million ie 4%, Italy US $3.0 million ie 9%, Netherlands US $2.4 million ie 9.9%, and UAE US $1.0 million ie 5.7% and Turkey US $3.9 million ie 119%.
Exports increased in 35 other countries as well but in dollar term these increases were less than US $500K in any one country. Some high growth trends were seen in Brazil 178%, Hong Kong 38%, Japan 64%, Argentina 51%, Lithuania 920%, Algeria 280%, Russia 73%, Ukraine 274%, Estonia 1023%, Latvia 126%, Kenya 55%, Lebanon 767%, Egypt 680%, Libya 1000%, Malta 80% and Zimbabwe 150%. This reflects the exporters search for new markets as the traditional US and EU markets become more competitive.
Major declines in exports were seen in the USA of US $76 million or 21%, UK US $5.6 million or 6%, Belgium US $11 million or 33%, Saudi Arabia US $3.2 million or 33%. Exports declines of around US $1 million to US $2 million were seen in Ireland, Sweden, Canada and France. Minor declines were seen in over 40 other countries. Significant decline trends in percentage terms were seen in Singapore 68%, Luxembourg 99.7%, Kuwait 78%, Oman 54%, Switzerland 55%, Mexico 49%, Sri Lanka 53%, Nigeria 97%, India 80%, Iran 68%, Bahrain 58%, Afghanistan 96%, and few others.
KNITWEAR:
The product range covered is jackets, blazers, men/boys knitted trousers, shirts, T-shirts, track suits, socks, gloves and other knitted garments of cotton, wool, artificial synthetic and other fibers, etc.
Total exports for six months ending December 2007 at US $936 million were 11% of total Pakistan exports (last year 11.5%). These were US $30 million below last year ie 3%. Combined export value of all countries where exports declined at US $693 million, was much more than the combined export value of countries where exports increased ie US $242 million.
Of countries where exports were less than last year the total decline was US $65 million. Of this USA alone declined by and US $46 million ie 7.3%, Netherlands US $8 million ie 17.7%, Spain US $2.6 million ie 8% and Hungary US $2.5 million ie 54%. All other countries that declined were lower than last year by less than US $450K each.
Of countries where exports were higher than last year, Germany led the growth and increased by US $7 million ie 23% followed by Italy US $5.7 million ie 19%, UAE US $5.5 million ie 65%, UK US $3.8 million ie 5%, Belgium US $2.3 million ie 12%, France US $1.7 million ie 11%, Saudi Arabia US $1.6 million ie 62%, Norway US $1.0 million ie 166%, Sweden US $1 million ie 32%. All other countries where exports were higher than last year produced an increase of less than US $500K in anyone country.
Some noteworthy trends in percentage term were Ireland 20%, Mexico 35%, Australia 20%, Sri Lanka 28%, Switzerland 56%. More than 30 countries were where exports increased over last year and where exports were more than US $1 million. With increasing competition in the traditional markets, this reflects the exporters efforts to seek new markets such as Poland, Qatar, Estonia, Russia, Argentina, Azerbaijan, Slovenia, Bahrain, Senegal, Morocco, Kyrgyzstan, Cyprus, Egypt, Iraq etc. TDAP continues to support these efforts with organised delegation and higher level of participation in exhibitions.
MADE-UPS OF TEXTILES:
The product range covered includes sanitary towels, napkins, dishcloth, wash cloth, bar mops, other cleaning cloth, bath mats and curtains etc. It does not include bed ware, pillow covers, towels etc.
Total exports for the 6 months ending December 2007 were US $255 million ie 3% of Pakistan's total exports and about the same as last year. These exports increased over last year by US $17.9 million ie 7.5%. Of the total net exports of US $255 million, countries where exports increased had a combined export value of US $233 million and those where exports declined were a total of US $22 million.
Export value of countries where exports grew was much more than export value of countries where exports declined.
In the countries where exports increased, the total increase was recorded at US $24 million. Of this US $24 million, significant increases were in USA US $7.4 million ie 5%, UK US $6.8 million ie 20%, Germany US2.0 million ie 25%, Netherlands US $1.3 million 30%, South Africa US $1.4 million ie 82%, UAE US $1.0 million ie 33% and Australia US $0.8 million ie 35%. There were 43 other countries where exports increased but no one country exceeding an increase of US $500K.
Some significant trends in percentage growth term were Poland 19%, Greece 37%, Kuwait 74%, Portugal 48%, India 130%, Brazil +678%.
In countries where exports declined the combined decline was US $6.0 million. This was mainly because of Italy US $1.2 million ie 12%, France US $1.2 million ie 22%, Spain US $0.6 million ie 18%. Some other significant declines in percentage terms were Ireland, Australia, Malaysia, Norway, Iran, Mexico, Russia and Sri Lanka.
BED WARE:
The product range includes woven and knitted products such as bed sheets, bed/pillow covers, bed linen, table linen/covers etc. Total exports for six months ending December 2007 were US $959 million. These exports were US $69 million lower than last year ie 6.7%. Out of the total exports of US $959 million, countries where exports increased were a total of US $378 million and where exports declined were a total of US $581 million.
Of the countries where exports were higher than last year, the total increase achieved was US $60 million. Of the total increase, the significant increases were achieved in Belgium US $10 million ie 86%, UK US $5.3 million ie 6%, Italy US $5.8 million ie 19%, Denmark US $4 million ie 48%, Brazil US $3.7 million ie 368%, Kenya US $1.3 million ie 50%, Poland US $1.0 million ie 38% and Greece US $0.7 million ie 30%. Increases were also recorded in 24 other countries and some significant percentage increases were in Estonia 132%, Philippines 97% and Egypt 1102%.
Of countries which remained lower than last year, the total decline was US $128 million. Of the major declines USA led with a drop of US $99 million ie 20%, Germany US $6 million ie 10%, UAE US $3.5 million ie 15%, Austria US $4.0 million ie 73%, Canada US $2.5 million ie 11%, Turkey US $2.0 million ie 93%, Switzerland US $1.4 million ie 53%, Australia US $1.2 million ie 6%, France US $1.1 million ie 2%, and Hungary US $1.0 million ie 48%. In addition to these countries exports declined in 32 other countries. Some significant declines in percentage terms were in Czech Republic 29%, Mexico 52%, Portugal 58%, Ukraine 57%, Indonesia 78%, China 90%, Japan 70%, Maldives 91% and Bangladesh 96%.
TOWELS:
Products included in this group are towels and products of towel material of cotton, mill made. Total exports were US $284 million or 3.3% of total Pakistan's exports (last year 3.9%). Exports declined over last year by US $39 million ie 12.2%. Of the total exports of US $284 million, countries where exports increased over last year were US $67 million only. Where exports declined, the total exports were US $217 million.
The total increase in exports achieved from countries where exports were higher than last year was US $15 million. Of this, the significant contributors were UAE US $2.4 million ie 24%, Spain US $1.4 million ie 17%, Sri Lanka US $1.2 million ie 350%, Netherlands US $1.0 million ie 15%, South Africa US $1.0 million ie +16%, Saudi Arabia US $0.7 million ie 22%, Brazil US $0.7 million 46%.
Apart from these countries exports increased in more than 35 other countries.
Some significant growth in percentage term was achieve in Ireland 34%, Portugal 55%, Malaysia 104%, Romania 99%, Argentina 404%, Austria 173%, Cyprus 97%, Lithuania 257%, Philippine 209%, Jordan 125% and Hong Kong 319%. These reflect the exporters and TDAP's efforts to diversify into newer markets.
The total decline in exports in countries which remained lower than last year was US $54 million. Of this, major countries which were lower than last year were USA US $43 million ie 23%, Canada US $1.4 million ie 18%, France US $1.4 million ie 33%, Sweden US $1.0 million ie 37%, Czech Republic US $0.8 million ie 56%, Russia US $0.7 million ie 37%, New Zealand US $0.8 million ie 22% and Belgium US $0.7 million ie 15%. Additionally declines were recorded in 27 other countries as well, with no one country declining by more than US $500 K. Some significant and noteworthy declines in percentage terms were Denmark 22%, Norway 18%, Turkey 93%, Mexico 81%, India 100%, Germany 3.48%, Italy 6.4%, Slovenia 36.3% and Kenya 29.5%.
ARTIFICIAL SILK AND SYNTHETIC TEXTILES:
The product range included is fabrics, synthetic filament, printed dyed or mixed, manmade staple fibers. Worldwide, textiles and apparel produced from manmade fiber or with manmade fiber is the dominant sector. In Pakistan this sector has remained depressed partly on account of poor growth in the filament yarn sector.
Be as that may, the current exports for six months ending December 2007 were US $256 million. This is an increase of US $41 million over last year ie 19%. It may be recalled that artificial silk and synthetic textiles exports, even last year, grew by 115% contributing US $229 million to the growth in Pakistan's exports.
Of the total exports of US $256 million. The countries that were performing better than last year produced a total export level of US $198 million. Those that remained below over last year were of a total export value of US $58 million.
The total increase generated by countries performing better than last year was US $58 million. Of this, the major contributors were UAE US $13.9 million ie 91%, South Africa US $8 million ie 77%, Saudi Arabia US $3.3 million ie 45%, Argentina US $2.8 million ie 43%, Mexico US $3.0 million ie 51%, Netherlands US $2.9 million ie 136%, UK US $2.0 million ie 16%, USA US $2.0 million ie 13%, Egypt US $1.0 million ie 27%, Greece US $1.0 million ie 25%, Vietnam US $1.1 million ie 763%, Malaysia US $0.8 million ie 197%, Sudan US $0.9 million ie 120%, Indonesia US $0.9 million ie 142%, Kenya US $0.8 million ie 134%. In addition to these countries exports increased to more than 32 countries.
Some noteworthy and significant trends in terms of percentage increases were Finland 32%, Hungary 41%, Australia 72%, Morocco 144%, New Zealand 133%, Romania US $0.6 million ie 2800%, Thailand US $0.6 million ie 1670% and Canada 19%.
Total decrease in exports as a total of all countries that remained below last year was US $18 million. Of this, significant declines were in Spain US $2.7 million ie 23%, Italy US $2.7 million ie 29%, Niger US $1.7 million ie 53%, Poland US $1.5 million or 31%, Belgium US $1.1 million ie 21%.
Exports of artificial silk and synthetic textiles has in last few years shown a very healthy growth trend and producers, exporters should fully capitalise on this opportunity. It appears that the opportunity is widespread as exports are not concentrated in a few markets and a large number of countries are reflecting a willingness to buy from Pakistan.
TENTS AND CANVAS:
This product group includes products such as sails, tents, tarpaulins, awaning, sunblinding, etc. Total exports for six months ending December 2007 were US $42 million and remained US $0.6 million or 1% below last year. The major countries contributing to increases over last year were Sudan US $9 million, with increases in Jordan, Kenya and Yemen remaining between US $1.0 million to US $1.3 million each; the major countries which pulled down Pakistan's exports were Saudi Arabia US $9.3 million ie 52% and Kuwait US $1.7 million ie 25%. This product group largely remains dependent on donor purchases and there is an enormous potential and need to diversify product range including products of the leisure industry.
Business Recorder [Pakistan's First Financial Daily]
