Economy
 
Pakistan’s shrinking exports in global markets
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Visits 174
March 30, 2012
Pakistan has witnessed an unfortunate scenario to maintain its earning resource at times it produced made-ups and cash crops in abundance but it felt the heat of global slow down of business that squeezed its growth in exports in the international market.

The shortfall in exports revenue target was attributed to the lower demand of Pakistan textile made-ups and edible commodities in the international market therefore the country has no opportunity to cash in its potential at times it has been facing tough financial challenges. Not only demand in the international market hit country’s exports but the energy crisis has decreased its production of exportable items, resulting exporters are not able to fetch foreign orders as against competitors particularly China and Bangladesh.

Pakistan’s exports in the period of July-February 2011-12 stood at $15.189 billion, showing a decline of 0.5 percent against the exports value of corresponding period of the last year 2010-11 that stood at $15.263 billion.

The growth in exports has been declining gradually since the beginning of the current fiscal year 2011-12 which has now posted a negative growth finally by end of February 2012.

The fall of exports may recover in the coming months but exporters and economic managers are not optimistic about its growth to settle back on track though it has been forecast to be settled negative by 3-6 percent in year-on-year terms by State Bank of Pakistan and Trade Development Authority of Pakistan.

The fresh exports projection suggested that it will be settled between $24. 1 billion to $24.6 billion hence miss to maintain all time high exports record of $25 billion, which was recorded in the previous financial year.

The contraction in exports were seen mainly because of huge fall in exports of textile products, which had 73 percent share in the last year overall exports. But it failed to continue its momentum and showed drop of 4.8 percent in the first half of the current financial year 2011-12, reaching $6 billion.

The share of textile has decreased from 67 percent of the total exports to 55 percent of the total exports because exporters have not been able to meet the exports order and foreign imports have been reluctant to place order for textile imports from Pakistan as it might not be able to deliver their orders timely owing to host of issues including law and order situation, prolonged energy issue.

Despite of the fact, European Union (EU) approved an export package of selected textile products that have been estimated to increase Pakistan’s exports by approximately $150 million to $175 million per annum but the benefits of the opportunity are seen to be reaped barely for enhancing exports, as there is need of coordinated and extraordinary efforts by the private sector and the government.

The country’s agriculture sector has seen record bumper production of wheat, cotton, sugarcane and rice, which are in surplus of the domestic demand and could have earned foreign exchange through exports but it went in vain because of dampening demand of all these food items in the international market.


The cotton yarn prices dropped by more than 50 percent since it reached in March 2011. Its prices are hovering around $1 per lbs, which was almost double in the previous year.

The cotton production has crossed 14 million bales but its lower demand and sliding cost in international markets could not generate positive impacts, however hopes of its recovery pinned again after February was seen sharp growth in export receipt.

Despite the country was hit badly by floods and torrential rains, the production of crops were witnessed overwhelming growth in the yields.

The production of wheat from all provinces is estimated to reach 25 million metric ton by end June 2012. The sugarcane crop was also recorded bumper to be yielded more than 57.6 million, which is annual target, though it is expected to cross 65 million tons level.

Similarly, the rice production was seen sharp increase in growth. It is estimated to be yielded up to 7.2 million ton as against 4.8 million production registered last year.

The bumper crop of cotton, wheat, rice and sugarcane should be capitalized to get exports earnings particularly in new markets otherwise, it should be stocked in a way that will help country to produce value-added products.

The economic managers and traders of the country may put together strong efforts to recover exports particularly through commodities trade that is required to bridge widening trade deficit reached at $14.6 billion and deteriorated current account deficit stood at $3 billion.

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