Trump Vows to At Least Quadruple US-Pakistan Trade

Talking with the media during Pakistan's Prime Minister Imran Khan's visit to the White House on July 22, 2019, US President Donald Trump said the United States “have a fantastic trade relationship (with Pakistan). I don’t mean we’ll increase it by 20 per cent. I mean, I think we can quadruple it. I think it could go — I mean, literally, it sounds crazy — you could go 10 times more. You could go 20 times more.” This is good news for Pakistan which has seen its exports stalled over the last 5 years. This has created a serious balance of payments crisis forcing the country to seek yet another IMF bailout.

US-Pakistan Trade Volume:

So what is the current volume of bilateral US-Pakistan trade?  The United States is currently Pakistan's largest export market accounting for 16% of the country's exports. The United States Office of the Trade Representative (USTR) website says that "Pakistan is currently our 56th largest goods trading partner with $6.6 billion in total (two way) goods trade during 2018. Goods exports totaled $2.9 billion; goods imports totaled $3.7 billion. The U.S. goods trade deficit with Pakistan was $783 million in 2018."

Pakistan's Exports to US: 

Pakistan's major exports to the United States are made up of garments and other textiles. In aggregate the apparel and textile industries accounted for 37.8% and 35.1% respectively of all U.S. imports from Pakistan in the 12 months to May 31, according to S&P Global Market Intelligence. Given Pakistan accounted for just 1.7% of U.S. apparel imports and 8.4% of textiles there may well be room for increased market share, particularly in light of US-China trade tensions.

Pakistan's Exports to the United States. Source: Standard and Poor ...

Pakistan's garments exports to the United States have jumped 12% in first quarter of 2019 from the same period a year ago, according to USITC Dataweb.  This double digit exports growth is being partly attributed to US President Donald's Trump ongoing trade war with China with the US government imposing 10% to 25% tariffs on certain Chinese goods. Pakistani rupee devaluation has also contributed to the nation's overall competitiveness.

Textile Exports to United States. Source: Bloomberg

American buyers are diversifying their supplier base away from China, the No. 1 exporter of these goods to the U.S. Already, Bangladesh is close to snatching the trousers-to-towel crown, according to Bloomberg News. Pakistan, at No. 6 last year, has grown its own shipments to the U.S. by almost 12% this year. It may overtake India, which has seen virtually no improvement.

Major US Importers of Pakistani Apparel: 

Who are the largest American importers of apparel and textile products from Pakistan? The largest importer of apparel and textiles from Pakistan in the past 12 months, aside from trade finance houses, has been Levi Strauss with 1,682 TEUs (Twenty Foot Equivalent Unit Containers) shipped. That followed a 101.5% year over year surge in shipments in 2Q. Other importers have also already been expanding their shipments. That was followed by JC Penney with 991 TEUs shipped after a 13.3% rise in 2Q while Adidas shipped 641 TEUs and grew by 9.9%, according to Standard and Poor Global Market Intelligence.

Biggest Importers of Apparel From Pakistan. Source: Standard and Po...

Pakistani Apparel Exporters: 

Pakistan's Interloop Limited based in Faisalabad is one of the largest manufacturers and exporters of apparel and textiles. The company recently raised nearly Rs. 5 billion on Karachi Stock Exchange to expand production of stitched denim designs for its clients including Levi’s and H&M. Interloop's major clients also include Nike, Reebok, Adidas, and Puma, as well as other major clothing retailers like Uniqlo and Target.

Pakistani Export Competitiveness: 

Pakistani apparel exports are becoming more competitive in international markets because Pakistani rupee has declined by almost 25% recently. This has wiped out the currency’s overvaluation adjusted for inflation differences with trading partners, as estimated by the IMF.

Average Annual Cost of Manufacturing Worker in US$ in Asia. Source:...

Textiles industry is just one the export industries seeing exodus of manufactures and buyers from China.  Electronics industry is seeing similar moves. Engadget is reporting that Google is moving production of its US-bound Nest thermostats and motherboards to Taiwan. The Wall Street Journal has reported that Nintendo is shifting at least some production of its Switch console to Southeast Asia.

Last November, Nomura Securities strategists had said they expected Malaysia, Japan and Pakistan  to be the top 3 beneficiaries of import substitution triggered by US-China trade war escalation. Nomura's analysis is based on detailed study of 7,705 items which will be subject to tariffs and counter tariffs by US and China if the stand-off continues. Nomura developed two indices as part of its research on the subject: NISI (Nomura Import Substitution Index) and NPRI (Nomura Production Relocation Index). This is good news for Pakistan which has seen its exports stalled over the last 5 years. This has created a serious balance of payments crisis forcing the country to seek yet another IMF bailout.

Pakistan's Stalled Exports. Source: Standard and Poor Global

Summary: 

President Donald Trump at his July 22, 2019 White House meeting with Prime Minister Imran Khan vowed to at least quadruple trade with Pakistan.  It means the bilateral trade between the two countries could grow from the current $6.6 billion to at least $26.4 billion.  Pakistan's garments exports to the United States have jumped 12% in first quarter of 2019 from the same period a year ago, according to USITC Dataweb.  This double digit exports growth is being partly attributed to US President Donald's Trump ongoing trade war with China with the US government imposing 10% to 25% tariffs on certain Chinese goods. Pakistani rupee devaluation has also contributed to the nation's overall competitiveness. This is good news for Pakistan which has seen its exports stalled over the last 5 years. It has created a serious balance of payments crisis forcing the country to seek yet another IMF bailout.  Pakistan's Interloop Limited based in Faisalabad is one of the largest manufacturers and exporters of apparel and textiles. The company recently raised nearly Rs. 5 billion on Karachi Stock Exchange to expand production of stitched denim designs for its clients including Levi’s and H&M. Interloop's major clients also include Nike, Reebok, Adidas, and Puma, as well as other major clothing retailers like Uniqlo and Target.

Here's a discussion recorded prior to the Trump-Imran Summit in Washington:

https://youtu.be/Y6fFRSpuNh0

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Comment by Riaz Haq on November 19, 2019 at 7:41pm

World-Beating #Pakistan #Stocks Have Juice as Funds to Join Rally. Large #investors, including mutual funds and insurers, are expected to jump in. #KSE100 #PSX #Karachi

https://www.bloomberg.com/news/articles/2019-11-19/world-beating-pa...

The rally that’s helped Pakistan stocks trounce the rest of the world in the past three months isn’t done yet, according to one brokerage.

Large investors, including mutual funds and insurers, are expected to jump in as double-digit returns from fixed income have begun to ebb away, A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities Pvt. said in an interview.


Pakistan’s KSE-100 Index has advanced to the highest level in seven months, after falling to the lowest in almost five years in August, amid attempts by the government to stabilize the economy with a $6 billion loan from the International Monetary Fund after a deficit blowout. At the same time, bond yields have begun to fall after peaking around 14% mid-year, making debt investments less attractive.

Out Performers
Pakistan stocks surge on government's steps to stabilize economy

Source: Bloomberg

* 3 months data till November 19 after Asian markets closing

“Banks are rethinking their strategy. They have to look at riskier assets now,” said Soomro, who spent about a decade as a fund manager at companies including Tundra Fonder AB. “So, the stock market is a tempting bet.”

Foreign investors have bought $64 million of the nation’s stocks this year, set for the first annual inflow since 2014. Their purchases will gather pace February after the nation’s next review by the Financial Action Task Force, Soomro said.

To read about how 13% return on debt prompted Pakistan investor’s to shun equities

Pakistan made just enough progress on global anti-money laundering and counter-terrorism financing standards in October to escape being placed on a blacklist. Still, the watchdog asked the nation to complete its action plan by February.

London-based Oxford Frontier Capital bought about a 40% stake in KASB Securities to relaunch the brand that was once the largest domestic brokerage in Pakistan. U.K.-based Sturgeon Capital also acquired a minor stake in KASB earlier this year.

Comment by Riaz Haq on November 27, 2019 at 10:20pm

#US sending 15 #trade delegations to #Pakistan next year: says Sec Alice Wells after her speech critical of #China and #CPEC - Newspaper - http://DAWN.COM

https://www.dawn.com/news/1519260


The paper, now posted at the US State Department’s official site, says that the US Commerce Department has “already stepped up its activity in Pakistan with 15 trade delegations planned for the next year”.

And once the new expanded Deve­lopment Finance Corporation (DFC) is up and running, “Pakistan is going to be a country of great interest”.

According to the paper, the DFC will have more than double the investment cap than the Overseas Private Investment Corporation (OPIC), increasing from $29 billion to $60bn. OPIC is a US government agency which mobilises private capital for overseas investments.

Document suggests US-Pakistan ties are going to expand

The paper argues that doubling the cap would enable investment in projects that have high standards and are financially sustainable over the long haul.

While urging Pakistan to benefit from these additional US resources, Ms Wells reminded Islamabad last week that “true sustainable development is really a marathon and not a sprint. It requires the development of effective regulatory framework, strong rule of law, fiscal health, and an enabling business climate”.

She recalled that during Prime Minister Imran Khan’s visit to the United States in July, President Donald Trump was “extremely enthusiastic about the potential for increasing and expanding our US-Pakistan trade and investment relationship. And both our governments are working very hard to find practical ways to do that. We commend Pakistan for surging 28 slots on the World Bank’s 2020 Ease of Doing Business ranking and being highlighted as one of the top ten reformers globally,” she added.

The paper also highlights some commercial connections between the United States and Pakistan such as, the US firm Excelerate is prepared to potentially invest more than $300 million to upgrade a floating storage regasification unit in Pakistan’s first LNG terminal.

ExxonMobil has been working to support Pakistan’s ambitious effort to access new LNG supplies.

Over the last five years PepsiCo has invested $800m to expand its infrastructure and diversify products, and Coca-Cola has invested $500m in the last couple of years, providing thousands of jobs for Pakistanis.

Uber Technologies entered the Pakistani market in 2016 and currently operates across nine cities, providing employment opportunities for thousands of Pakistanis.

The paper argues that US corporate social models are outstanding vehicles that create jobs and opportunities for communities associated with these foreign investments.

So, the US-Pakistan Women’s Council, for instance, fosters cooperation between American and private sector, Pakistani private sector, to mentor women and girls. Another American brand, KFC, supports the education of children with hearing disabilities and other underprivileged young people, partnering with schools throughout Pakistan.

Proctor & Gamble’s Children’s Safe Drinking Water Programme has provided 875m litres of clean drinking water to Pakistani communities in need.

Noting that US companies bring superior quality and technology, the paper points out that Pakistani leaders often praise US companies like Cargill and Corteva, that are passing critical technology and driving “enormous productivity gains in Pakistan’s huge agricultural sector”.

The US has also helped establish some of Pakistan’s most prestigious educational institutions and centres including Lums, IBA, JPMC and the Centre for Advanced Studies in Energy at Nust.

“And just to be crystal clear, the US-Pakistan development partnership has primarily taken the form of grants — not loans,” said Ms Wells while adding that such links “offer a sense of the direction that we envision”.

Comment by Riaz Haq on December 25, 2019 at 1:37pm

#Pakistan exported $1,156 million worth of readymade #garments (#RMG) in five months, showing an increase of 36% in quantity and 13.19% in value. #exports
https://www.brecorder.com/2019/12/21/555315/pakistan-exports-increa...

Pakistan exports increase by 4.8pc in five months: Finance advisor
By Ali Ahmed on December 21, 2019
Sheikh said that from July-Nov 2019, exports increased by 4.8pc as compared to same period last year.
Value added exports like readymade garments, knitwear and other major exports are showing strong pick up in both quantity & value, he said.

Adviser to the Prime Minister of Pakistan on Finance and Revenue Abdul Hafeez Sheikh said that strong export growth is essential for the industrial expansion and job creation in an economy, as Pakistan posted 4.8pc export growth.

In a tweet, the advisor said that in five months (July-Nov 2019) exports increased by 4.8 percent as compared to same period last year. “Value added exports like readymade garments, knitwear & other major exports are showing strong pick up in both quantity & value," he said.

As per the data of Major Exports of Pakistan in 2019-20 (July-November) shared by Hafeez, knitwear items worth $1,320 million were exported in the five months, showing a quantity increase of 6 percent and value increase of 8.69pc.

Whereas, Pakistan exported $1,156mn worth of readymade garments in five months, showing an increase of 36pc in quantity and 13.19pc in value. Meanwhile bedwear was third on the list with $1.013bn worth of exports, an increase of 14.37pc in quantity and 4.69pc in value.

Comment by Riaz Haq on January 28, 2020 at 7:43pm

State Bank of #Pakistan unveils Rs200 billion exports stimulus in the form of loans for #export oriented sectors under concessionary Long Term Financing Facility (LTTF) and Export Financing Scheme (EFS). https://www.thenews.com.pk/print/605526-state-bank-of-pakistan-unve...


“Rs100 billion at concessionary rate had been allocated for LTTF for all exporting sectors,” Baqir said. The existing rate of refinance under LTTF is 6 percent for the end user. “The maximum limit of borrowing for an industry has been increased from Rs2.5 billion to Rs5 billion.” Governor Baqir, previously, emphasesd that the country needs a shift to an export-based economy to achieve high and sustainable growth.

The economy expanded 3.3 percent in the last fiscal year of 2019, the weakest annual pace in more than nine years, as exports - a key growth driver – had declined amid high cost of doing business and a strong rupee.

The government estimates economic growth to plummet to 2.4 percent, the slowest pace in over a decade, in the year started July. Governor Baqir said the SBP would announce another concessionary policy for small exporters.

“The business community is facing hardship due to changes in advance import payment… Considering their problems, advance payment restriction is eased and the central bank allowed 50 percent advance payment,” he added. “In the latest decision, the SBP allowed 100 percent advance import payment.”

Besides, related to import on open account basis, the SBP governor announced to include commercial importers in this regime. He said that the SBP received several representations from commercial importers to allow open account facility as allowed to other sectors of the economy.

The per project limit for LTFF has been increased by 100 percent to Rs5 billion to counter impact of rupee devaluation. The EFS limit meant for working capital has also been increased by an additional PKR100 billion. Amended foreign exchange regulations to support manufacturing sector.

Almost 100 percent of letter of credit amount can be made in advance for machinery, spare parts and raw materials. Importers other than manufacturers can import on behalf of manufacturers on open account. Pakistan’s exports of goods declined 3.96 percent year-on-year in December 2019 despite cash support and multiple currency depreciation. Exports clocked in at $1.99 billion in December, down 3.96 percent over $2.07 billion in corresponding month last year.

For the six-month period between July and December, exports edged up by 3.17 percent to $11.53 billion, as against $11.18 billion in same half last year. Analysts, however said the numbers are not commensurate with the level of cash support, concessions in utilities and multiple currency depreciations.

Comment by Riaz Haq on January 28, 2020 at 7:55pm

U.S., CHINA, U.K. TOP EXPORT DESTINATIONS FOR #PAKISTAN. #Exports to #US in 1H/FY20 at $2,074.168 million, against $2,018.797 million in 1H/FY19. #China $889.642 million and #UK at $863.347 million in 1H/FY20 https://www.newsweekpakistan.com/u-s-china-u-k-top-export-destinati...

DATA RELEASED BY CENTRAL BANK SHOWS MASSIVE DROP IN EXPORTS TO INDIA DUE TO FROSTY RELATIONS

The U.S. was the top export destination for Pakistani goods in the first half of the current fiscal year (FY2019-20), while neighboring India witnessed a massive plunge, according to data released by the State Bank of Pakistan.

The central bank’s monthly report on export receipts revealed that total exports to the U.S. during July-December 2019 stood at $2,074.168 million, against $2,018.797 million in July-December 2018, showing a mild increase of 2.74 percent. Similarly, Pakistan exported $936.858 million to China in FY19-20, compared to $889.642 million in FY18-19, an increase of 5.3 percent.

Coming in third, the U.K. received Pakistani exported products valued at $863.347 million during the first half of the current fiscal year, showing a decrease of 3.54 percent from last fiscal’s $895.074 million.

The data issued by the State Bank also revealed that the Pakistani exports to the United Arab Emirates hit $827.731 million in FY19-20, against $638.221 million in FY18-19, a substantial increase of 29.69 percent. Exports to Germany, meanwhile, were recorded at $670.833 million in the current fiscal, showing an increase of 3.64 percent against the $647.285 million recorded last year.

Additionally, the data shows, exports to Afghanistan reached $543.159 million, showing little change from the $534.654 million they stood at last year. Similarly, exports to Spain hit $445.086 million this year against $448.162 million in FY18-19.

Other major trade partners that showed little change in exports between last fiscal and this year were: Italy, which hit $386.969 million in FY19-20 against $379.409 million last year; Bangladesh at $369.313 million this year against $378.193 million in FY18-19; Belgium at $266.187 million (FY19-20) against $301.740 million (FY18-19); France at $222.013 million (FY19-20) against $228.707 million (FY18-19); Singapore at $117.594 million (FY19-20) compared to $130.160 million last year; Canada at $143.424 million against $148.368 million; and Saudi Arabia at $243.213 million against $151.389 million.

Pakistan witnessed a dramatic decrease in exports to neighboring India in the current fiscal, hitting $16.878 million against the $213.655 million that was earned last year. This is a massive drop of 92.1 percent. The reduction in exports is largely linked to ties worsening between the two nations in recent years, especially in light of New Delhi unilaterally scrapping the special autonomy for Jammu and Kashmir that had been enshrined in the country’s constitution.

Comment by Riaz Haq on February 23, 2020 at 10:23am

#Pakistan #textile sector at full production capacity. “If all goes well, the developments in textile industry support…the government to achieve the set export target of $24-25 billion this fiscal year” #exports #trade The Express Tribune

https://tribune.com.pk/story/2162491/2-textile-sector-jumps-full-ca...


The textile manufacturing sector – the single largest export-oriented sector of Pakistan – has spiked to full-capacity production after the government withdrew duties and taxes on import of the raw cotton in January.

Besides, Islamabad is getting higher export orders for textiles since China, the single largest textile exporter at world across, is lying closed to fight against the deadly coronavirus for the past couple of months.

“Pakistan (textile sector) is working on full capacity,” All Pakistan Textile Mills Association (Aptma) former chairman Asif Inam told The Express Tribune on Saturday.

“If all goes well, the developments in textile industry support…the government to achieve the set export target of $24-25 billion this fiscal year (July-2019 to June 2020),” he said.

“We don’t have the capacity to take additional export orders these days. We have entered into the capacity constraint zone,” he said.

He said there is a 26% volumetric growth in textiles export. “This (26%) was the capacity in surplus till recent months. The government has fully utilised that,” Inam same.

State Bank of Pakistan Governor Reza Baqir said the other day there was up to 40% volumetric growth in textile exports. Besides, the export of finished goods is on the rise, while export of raw material, including cotton and yarn are on a downward trend, which are positive developments for Pakistan’s economy.

Pakistan has continued to receive good export orders, including in the downstream industry. “The world textile buyers have diverted their purchasing orders to Pakistan since China (70-80% production) is closed to fight against spread of the coronavirus,” Inam said.

The virus has disrupted the world. A significant number of countries have been affected by the virus, as over 2,300 people have died and over 75,000 people got infected.

The official claimed that the textile exports could be doubled over the next five year if the government overcomes the high energy pricing, gas connection and tax refund issues. The Aptma has demanded a long-term five-year textile policy from the government. “Once the government announces the policy, the textile exports will start growing at 10-15% per annum over the next five years,” he added.

Cotton import

He said Pakistan is estimated to import around 7.5-8 million bales (of 170 kilogram each) this fiscal year after local production came almost half of the required 15 million bales in FY20.

They will be record high import in Pakistan. Pakistan has produced around 7.5-8 million bales so far, which comes to around half of the domestic requirement.

“We have so far imported around one-third of the total required quantity of imported cotton at 7.5-8 million bales. We will import around 70% of that over the next two-three months and remaining in the rest of the period of FY20,” he said.

High energy, water costs may push Pakistan’s apparel industry towards crisis

The import of cotton paced up following the government withdrew 3% regulatory duty, 2% additional customs duty and 5% sales tax on import of cotton from January 15, 2020.

The imposition of the duty and taxes on cotton import by the previous government in the centre had put the textile industry in danger.

“The withdrawal of duty and taxes has fully mitigated the risk of decline in cotton consumption in Pakistan.

USAID has recently anticipated increase in consumption of cotton at textile industries in Pakistan. We will use at least 15 million bales this year (FY20),” Aptma former chairman said.

Comment by Riaz Haq on March 3, 2020 at 8:02pm

#Pakistan’s #trade deficit down 27% to $15.7billion in first 8 months of FY 2019-20. In #February, #export jumped 13.6% to $2.13 billion, giving a reason for celebration.Total exports up 3.6% to $15.6 billion in Jul-Feb of current FY. #economy #PTI https://tribune.com.pk/story/2168222/2-pakistans-trade-deficit-cont...

Pakistan booked a trade deficit of $15.7 billion in first eight months of current fiscal year, down 27% due to suppression of imports, amid rekindled hopes for the revival of exports that bounced back after contracting for three months in a row.

In February, export receipts showed an increase of 13.6% and amounted to $2.13 billion, giving a reason for celebration to members of the government’s economic team, who immediately started sending congratulatory tweets.

Export receipts in February hit the highest level in nine months. Last time in May 2019, the exports had risen to $2.1 billion, according to Pakistan Bureau of Statistics (PBS) figures.
Since then, exports have fluctuated between $1.7 billion and $2 billion, which does not reflect the true potential. Historically, exports have stayed around $2 billion a month. The Ministry of Commerce took to Twitter to announce the trade statistics, which otherwise is the responsibility of the PBS.

Total exports increased 3.6% to $15.6 billion in Jul-Feb of the current fiscal year, announced Commerce Secretary Ahmad Nawaz Sukhera through his Twitter handle.

In absolute terms, Pakistan managed to increase exports by $547 million from July through February.

The cumulative increase in exports was appreciable when compared with the export trend in Pakistan’s competing countries and the global economic situation, stated the commerce secretary.

Imports during the eight-month period dropped 14.4% to $31.3 billion, according to the commerce secretary. In absolute terms, imports contracted $5.3 billion, which provided some relief for the government.

After the first review, the International Monetary Fund (IMF) projected that the trade deficit of Pakistan in the current fiscal year would narrow down to $24.3 billion, also slightly lowering its projections due to weakening exports.

The IMF had earlier predicted that exports would grow to $26.8 billion but in its latest report the estimate was revised down by nearly a billion dollars to $25.7 billion.

Overall, the trade deficit, which stood at $21.5 billion in the first eight months of previous fiscal year, shrank to $15.7 billion in the same period of current fiscal year. In absolute terms, there was a reduction of $5.8 billion in the trade deficit and 91% of the improvement came from the import side.

Eight-month exports were equal to 58.2% of the annual target of $26.8 billion while imports were equal to 60% of the target of $51.7 billion.

In the ongoing financial year, due to global slowdown and other factors such as Brexit, exports of India declined 1.9% and Bangladesh’s exports fell 5.2% while Pakistan’s exports increased 3.6%, said Aliya Hamza Malik, Parliamentary Secretary for Commerce and Industry.

She said the textile sector was running on full production capacity and food exports were also rising significantly.

Successive governments have been providing subsidised loans, gas and electricity to the exporters but they have always asked for more. The Pakistan Tehreek-e-Insaf (PTI) government has once again reached an understanding with the exporters, promising them to provide cheaper electricity and gas.

Over a year ago, the PTI government had also given huge benefits to the exporters and in return they promised to revive 200 closed units. But no one talked about the revival of units after winning concessions from the government.

On a yearly basis, exports increased 13.6% to $2.13 billion over the same month of last year, a net increase of $256 million.

Comment by Riaz Haq on September 22, 2020 at 1:41pm

Readymade Garments Exports Increase By 18.04%

https://www.urdupoint.com/en/business/readymade-garments-exports-in...

The Readymade Garments exports during first month of current financial year increased by 18.04 percent as compared the corresponding period of the last year.

According to Pakistan Bureau of Statistics (PBS), the Readymade garments exports worth US $274,246 thousand in first month of current financial year to US $232,327 thousand of the same period of last financial year.

During the period from July 2020, exports of Art, Silk and Synthetic textile increased by 14.

01%, worth $28,388 thousand as compared the exports valuing $24,900 thousand of same period of last year, it added.

Meanwhile, Madeup Articles exports increased by 26.04%, worth $60,805 thousand as compared the exports of valuing $48,244 thousand of the corresponding period of last year.

During the period under review, buses, Other Textile materials exports increaseed by 66.46%, valuing $48,758 thousand exported as compared the export worth $29,292 thousand of same period of last year.

----------

Garment orders move to Pakistan, as COVID bites India, Bangladesh
However, the garment sector in the country is facing a severe shortage of yarn due to a shortage of cotton.

https://www.brecorder.com/news/40020319


As the coronavirus pandemic continues to spread unabated in India and Bangladesh, garment orders from international markets are rapidly shifting towards Pakistan.

However, the garment sector in the country is facing a severe shortage of yarn due to a shortage of cotton.

As per reports, the development comes at a time when export orders are declining in Pakistan's neighboring countries due to the COVID pandemic, there is a flurry of export orders for Pakistan's garment sector, as India and Bangladesh, affected by the pandemic, have not yet been able to produce and deliver goods to European and American markets on time.

This has pushed the entire production pressure of the textile industry on Pakistan's textile exports.

However, there exist a major hurdle for the local industrialists to take advantage of this opportunity, as they say, that they are worried about the shortage of raw material, especially yarn, for the orders received by the garment sector.

Industrialists say that the international client gives 35 to 40 days for shipments but the local mill is giving them three months' time.

Exporters say that if the government does not take immediate action, not only will orders from rival countries stop moving to Pakistan, but local industrialists will also lose out to permanent buyers.

Comment by Riaz Haq on September 22, 2020 at 2:19pm

Textile exports decline 15pc YoY in August

Pakistan's textile and clothing exports clocked in at $1bn in Aug 2020, as compared to $1.19bn in Aug 2019

https://profit.pakistantoday.com.pk/2020/09/21/textile-exports-decl...

Pakistan’s textile exports have shown a 15 per cent year-on-year decline in August FY21, as compared to same month of the previous fiscal.

According to data released by Pakistan Bureau of Statistics (PBS) on Monday, Pakistan’s textile and clothing exports declined by over 15 per cent year-on-year in August 2020, from $1.19 billion in Aug last year to $1.007 billion.

The textile industry boasts a significant presence in Pakistan, being the largest manufacturing industry and the largest export earning sector. It contributes 8.5 per cent to the gross domestic product (GDP) of the economy and employs 45 per cent of the labour force in the country.

Exports in the textile sector have dipped in the second month of the current fiscal year after posting a growth in the first month. The Covid-19 has severely hampered the demand for the country’s textile exports during the last five months.

Earlier, it was only in February when the textile and clothing exports jumped nearly 17 per cent YoY. This growth was reported after a long time as the past few years had been marred by single-digit increases.

Details showed readymade garments exports declined by 13.74pc in value and drifted much lower by 51.83pc in quantity during August, while those of knitwear dropped 10.65pc in value and 27.2pc in quantity, and bed wear posted negative growth of 12.29pc in value and 25.52pc in quantity.

Towel exports fell by 10.12pc in value and 15.85pc in quantity, whereas those of cotton cloth dipped 17.91pc in value and dipped by 33.42pc in quantity.

The government lifted the ban on exports of seven products classified as personal protective equipment (PPE) in a bid to allow manufacturers to honour international orders.

Among primary commodities, cotton yarn exports dipped by 51.36pc, while yarn other than cotton by 100pc. Export of made-up articles — excluding towels — declined by 5.82pc, and tents, canvas and tarpaulin increased by a massive 34.07pc during the month under review. The export of raw cotton declined by 94.4pc during the month under review.

The import of textile machinery dropped by 30.27pc during the second month of the current fiscal year — a sign that no expansion or modernisation projects were taken up by the textile industry during the month.

The country’s textile and clothing exports posted a negative growth of over 6pc year-on-year to $12.526bn in the fiscal year 2019-20 compared to $13.327bn in the corresponding period last year.

Comment by Riaz Haq on December 25, 2020 at 12:22pm

This year, after Pakistan lifted its comprehensive coronavirus lockdown in May while other countries in the neighborhood kept their economies closed, international textile orders have been diverted to Pakistan, leading to a nine-year record in exports, Aliya Hamza Malik, parliamentary secretary for commerce, told Arab News.

https://www.arabnews.pk/node/1782136/pakistan

“Pakistan’s policy of early easing of lockdowns and opening the economy has diverted export orders from China, India and Bangladesh to Pakistan,” she said. “The exports in November 2020 have broken a nine-year record.”
Malik said the industry was currently running at 110 percent capacity, with export orders until June 2021.
Waheed Khaliq Ramay, chairman of the Power Looms Association of Pakistan, said factory owners were “desperately” searching for workers as “almost all power looms in Pakistan, and particularly in Faisalabad, were running at full capacity.”
“Those that were closed since 2016-17 and before are now back in business and continuously expanding,” Ramay said.
Faisalabad has around 300,000 fabric-manufacturing power looms, of which more than 50,000 were closed in 2016-17 due to a long-running energy crisis. But industry officials say the industry is picking up once more, with 40,000 new power looms being set up to meet growing demand, Malik said.
The textile industry, which comprises 46 percent of the total manufacturing sector and provides employment to around 25 million Pakistanis, contributes 8.5 percent to the GDP, according to the Pakistan Board of Investment. It also contributes 60 percent to overall exports and is one of the major earners of foreign exchange for Pakistan.

Despite a global economic slowdown due to COVID-19, Pakistan’s textile sector reached $6 billion exports in the first five months of current fiscal year (July-November 2020), which is 62 percent of total exports (worth $9.7 billion) and almost 5 percent higher compared to the same period last year, official data shows.
“Incentives and export facilitations have played a big role in making Pakistan a competitive exporting country,” Malik said.

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