Musharraf Era Textile Boom Returning to Pakistan?

[Riaz Haq]

Pakistan textile industry is booming with exports soaring 27% to more than $6 billion in the first four months (July-October) of the current fiscal year. “We believe that $5 billion investment (in textile industry) in the Musharraf era would be matched in the next six to eight months”  says Zubair Motiwala, a leading textile industrialist and chairman of Businessmen Group (BMG), as quoted in the Pakistani media reports. Pakistan textile exports more than doubled from $5.2 billion to more than $11 billion during Musharraf years. Exports soared 19.43% in 2001, 20% in 2004, 24.5% in 2005 and 11.23% in 2006, all on President Musharraf's watch, according to "The Rise and Fall of Pakistan's Textile Industry: An Analytical View" published by Javed Memon, Abdul Aziz and Muhammad Qayyum.     

Pakistan Textile Exports Growth. Source: Javed Memon

Pakistani government officials report that the textile sector has invested $3-3.5 billion on modernization and expansion in the last 2-3 years and the investment is likely to match the $5 billion that was witnessed during Musharraf era when the sector was undergoing major modernization, balancing and replacement (BMR). Textile machinery imports jumped 110% in the last four months, according to the Pakistan Bureau of Statistics (PBS). Capital equipment imports are contributing to Pakistan's widening trade gap. 

Pakistan Textile Exports Boom. Source: Bloomberg

All sectors of the textile industry from yarn to fabric to ready-made garments are experiencing double digit growth.  Ready-made garments exports jumped 22.34% during July-Oct 2021,  knitwear exports soared 35.45%, bed-wear posted positive growth of 21.30%, towel exports were up by 14.17%, cotton cloth rose 18.54%. Among primary commodities, cotton yarn exports surged by 71.39%, while yarn other than cotton by 114%. The export of made-up articles — excluding towels — rose by 11.55%, and tents, canvas and tarpaulin dipped by a massive 23.98% during the 4-month period.

International Comparison of Textile Machinery Imports. Source: Busi...

History of Pakistan Textile Machinery Imports 2004-2021 in Millions...

The textile industry is very important for Pakistan's economy. It is a very large employer and contributes nearly 10% of GDP.  Textile exports account for more than half of Pakistan's exports.  Unfortunately, the textile industry has stagnated in the last 12 years. Textile boom is good news for the country's economy. 

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[Riaz Haq]

Pakistan’s garment industry has not taken the full advantage of its access to the European Union market because the sector is facing massive shortage of skilled manpower, said Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) North Zone Chairman Sheikh Luqman Amin.

https://tribune.com.pk/story/2331418/lack-of-skilled-workforce-hind...

In a statement on Saturday, he added that the government needed to collaborate with the industry to identify the areas where trained and skilled manpower was needed in a bid to enhance share of Pakistan in the global garment export segment.

“We are making adequate efforts to upgrade the industry on modern lines and enhance export volume in many fields,” he said. “There is a great scope of growth in the value-added garment industry in the export-oriented city of Sialkot which is now producing 40% of the world’s martial arts apparel.” He stressed that the expansion of Sialkot’s value-added garment sector can only be made possible through the removal of hurdles like lack of skilled labour, expansive electricity and irregular gas supply.

Amin saw large scope of additional growth after the continuation of GSP Plus status for another decade but lamented that there was no roadmap in place to produce professionals that could be absorbed by the industry. On behalf of the apparel industry, he appealed the government to make amendments in labour laws and revise the age limit of labourers working in the industrial sector.

He highlighted that the industry was facing problems due to a shortage of trained and skilled industrial workers. The official held the view that after revision in the law, youth would have the opportunity to work in a pleasant atmosphere in the export industry and the menace of bonded labour would be eliminated in the country.

[Riaz Haq]

China to bolster textile sector
Cooperation in cotton industry providing possibilities for textiles


https://tribune.com.pk/story/2330653/china-to-bolster-textile-sector


XINJIANG:
If you walk into a clothing store in any shopping mall in a major Chinese city – whether it is an international or a local brand – “Country of Origin: Pakistan” hang tag is not uncommon.

Especially in the jeans wear section, these high-quality Pakistani products are increasingly popular with Chinese consumers.

According to the Pakistani government, the textile industry contributes nearly 60% to the country’s total exports. Denim fabric, as one of Pakistan’s main garment products exported to the world, occupies a pivotal position in its garment industry chain.

According to the Pakistan Bureau of Statistics (PBS), exports of denim fabric from Pakistan reached Rs96.92 billion during the year 2017-18, a commendable performance of the denim sector.

However, whether it is jeans wear or other garment products, the impact of recent global cotton prices and other factors cannot be ignored.

Pakistani industrialists argue that the textile and garment industry of the country faces a series of challenges, including low production of cotton and difficulty in obtaining financing for new facilities.

Cotton industry: China-Pakistan cooperation

Pakistan, one of the world’s largest cotton producers, is finding it increasingly hard to meet its own needs.

“Last year, we had to import more than 50% of cotton,” said Sapphire Fibre Executive Director Muhammad Abdullah. Low production and quality force the local industry to choose imports.

“So far, the domestic consumption of cotton is 14 million bales. Nevertheless, Pakistan only harvested 5.6 million bales of cotton in the last season,” he said.

“As far as I am concerned, the seed of high quality must be the top priority. Unless we can increase the yield per unit area, the demand cannot be met,” he added.

The idea of Muhammad Abdullah was echoed by Central Cotton Research Institute Director Zahid Mehmood. “Under CPEC, we hope to see the plan between China and Pakistan in cottonseed cooperation soon,” he said.

Regarding this, Xinjiang Agricultural University Deputy Dean Chen Quanjia introduced further planning during an interview with China Economic Net.

“Local high temperature-resistant cotton varieties in Pakistan are of great use to us,” Quanjia said. “In Xinjiang, the heat resistance of cottonseed is particularly indispensable when facing the extreme high temperature. At the same time, our high-yielding cotton varieties are also needed for Pakistani farmers,” he said.

Recently, international cotton futures have remained high, and China’s domestic cotton futures prices have also risen simultaneously.

According to a survey conducted by the China Cotton Association, the country’s cotton planting area this year has dropped year-on-year, but due to favourable weather conditions, the total output remains relatively stable.

It is expected to be 5.83 million tons, down 1.5% year-on-year. Improving cotton production to maintain the stability of the futures market will be a problem, demanding prompt solutions from China and Pakistan.

Besides, the impurity, which is caused by 100% manual picking, also worsens the dilemma of Pakistan cotton.

Sapphire Fibre cotton field supervisor Kamran Razaq said that the impurity content of imported cotton is 4.5%, while the counterpart in Pakistan cotton is 8-9%, which is well below the criteria of textile mills.

Accordingly, Xinjiang Agricultural University and University of Agriculture Faisalabad (UAF) have set up experimental fields in Faisalabad and plan to test mechanical picking in Pakistan.

“In north Xinjiang, one of the biggest cotton areas in China, the mechanisation can reach 90%. We use machine picking everywhere so as to decrease the impurities,” Chen Quanjia said, adding that in future, China’s advanced cotton pickers can play a role in Pakistan as well.

[Riaz Haq]

#Pakistan #textile #exports likely to achieve $20 billion target in current FY21-22. “Higher textile exports came on the back of strong growth in value-added products, particularly knitwear, home textiles, bedwear, towels and made up articles.” #economy
https://tribune.com.pk/story/2331666/textile-exports-likely-to-achi...

LAHORE:
Keeping in view the rebound in textile exports, traders have said that Pakistan can achieve the export target of $20 billion owing to export-oriented policies of the government and strong economic recovery in major export markets.

In a statement on Monday, Pakistan Textile Exporters Association (PTEA) chairman underlined that the textile export industry was entering the phase of sustainable economic growth after attaining stability. They anticipated the segment to keep moving forward to achieve lofty growth rate.

Expressing satisfaction on the rising trend, the chairman highlighted that the country’s exports had witnessed a rapid recovery since the Covid-related restrictions were lifted.

In the recent months, the outbound shipments of Pakistan have increased compared to the regional competitors - Bangladesh and India, he said.

Quoting figures, he pointed out that in October, shipments recorded highest ever monthly average of $2.46 billion.

Textile exports posted 24.24% growth in the same month, rising to $1.6 billion, he added.

Similar trend was observed in the first quarter of this fiscal year as textile exports grew by 26.55% to $6.02 billion, compared to $4.76 billion during the same quarter of previous year, the chairman highlighted.


“Higher textile exports came on the back of strong growth in value-added products, particularly knitwear, home textiles, bedwear, towels and made up articles.”

Rejecting the claims that the country’s exports had declined in terms of quantity, he said that foreign shipments of bedwear, during the quarter under review, increased to $1.09 billion from $899.55 million, showing a year-on-year growth of 21.3% in terms of value.

Exports of towels rose by 14.17% to $323.38 million from $283.25 million in the same quarter of previous year. In volumetric terms they increased by 7.75% year-on-year to 71,701 tons from 66,545 tons.

Foreign shipments of readymade garments surged by 22.34% year-on-year to $1.16 billion from $947.07 million and in terms of volume, they increased by 20.5% compared to the same quarter of previous year.

“At the same time, raw cotton, cotton yarn and cotton cloth showed a declining trend,” he said, adding that this was the indication that the value-added sector was the “main engine of growth”.

[Riaz Haq]

#Pakistan has bumper #rice crop of 11.43 tons of rice this season. Poised to #export near-record 8 million tons of rice worth $5 billion. #food https://www.thenews.com.pk/print/912775-pakistan-poised-to-export-n...

Bolstered by a bumper crop, Pakistan is poised to export near-record volumes of rice this season as the country struggles to manage surplus stocks of grain, a minister said on Monday.


Pakistan planned to offer over 8 million tons of rice to foreign buyers as by December around 11.43 million of rice stocks will be available in the market for 3.4 million tons of local consumption.

Syed Fakhar Imam, minister for National Food Security and Research said the country would offer rice worth $5 billion this season for exports to cut its ballooning surplus “but at the same time it’s a challenging task”.

“This year we have over 8 million tons of exportable, worth around $4.85 billion. If we succeed in exporting this surplus rice, it would be a major breakthrough,” Imam told a news conference.

China, Kenya, UAE, Afghanistan and Saudi Arabia were key exports destinations of Pakistani rice over the last five years and imam said the government is mulling to setup a committee or

task force on national level under the supervision and monitoring of the Prime Minister to push rice exports to new markets including. Africa and Latin-America

“Exports have been a major challenge for the country over the last one decade and have been in the bracket of $21 to $25 billion. If this avenue is exploited and the rice is exported, the country can earn more forex and jack up our total exports,’ he added.

Imam said the provincial crops reporting departments have reported a bumper rice crop of 8.96 million tons from 3.5 million hectares during the Karif 2021/22 crop year. Last year the country produced 8.41 million tons of rice.

The government estimates that total available stock by December 2021 will be 11.43 million tons. Deducting 3.40 million tons for domestic consumption, 8.03 million tons is available as exportable surplus.

Of the total exportable surplus, approximately 30 percent is basmati (2.41 million tons). Currently, the average export prices of basmati and coarse rice are $870/ton and $490/ton respectively. At these prices, Pakistan can earn $2.10 billion and $2.75 billion (total $4.85 billion) from the export of basmati and coarse rice, respectively.

Official data showed that the country produced 8.41 million tons of rice and had a carryover stock of 0.51 million tons. Around 8.92 million tons of grain stock is available for domestic consumption and export.

Up to November 2021, approximately 3.1 million tons were domestically consumed and 3.34 million tons was exported. Currently, the country has last year’s carryover stock of 2.47 million tons.

During the last fiscal year, Pakistan exported 3.50 million tons of rice, valuing $2.11 billion. However, rice exports fell 12 percent compared to exports of FY2019-20 due to Covid-19 related disruption in shipments.

“In FY2021-22, our exportable surplus is 128 percent higher than that of last year. Now that the shipment disruption is easing, Pakistan should make every effort to export 8.03 million tons and earn $4.85 billion which will be $2.74 billion more than that of last year,” Imam said.

[Riaz Haq]

Engro Corporation
@EngroCorp
·
Dec 10
With the addition of new 100,000 tons PVC III Plant, inaugurated by PM
@ImranKhanPTI
, Engro Polymer & Chemicals will now contribute around $240 million towards import substitution per annum, and fulfill export orders as well.


https://twitter.com/EngroCorp/status/1469376775914459141?s=20

-------------------

Prime Minister Imran Khan inaugurated on Friday a 100,000-tonne PVC III plant of Engro Polymer and Chemicals (EPCL), which will enable import substitution of polyvinyl chloride (PVC) and boost exports, a press release said.

Addressing the ceremony, Prime Minister Khan said the government supports the expansion of local businesses in order to ensure import substitution and achieve higher exports. He urged the business community to focus on import substitution and diversification of the export base to support sustainable economic growth.

A subsidiary of Engro Corporation, EPCL is the only fully integrated chlorvinyl chemical complex and producer of PVC in Pakistan.

The plant expansion took place with up to $50 million financing support from the International Finance Corporation (IFC) and leveraged global expertise in project execution with a Japanese licenser and Chinese construction team.


EPCL can now produce 295,000 tonnes of PVC per annum. The press release said EPCL will now be contributing around $240m towards import substitution.

The company also exported PVC resin worth $25m to Turkey and the Middle Eastern markets in 2021. Demand for PVC has grown at six per cent a year, with around 70pc of the consumption originating from the construction sector.

https://www.dawn.com/news/1663146

[Riaz Haq]

Pakistan exports beat half-year target

https://tribune.com.pk/story/2336988/exports-beat-half-year-target

Talking to The Express Tribune, Arif Habib Limited analyst Sana Tawfik said that imports increased 63% year-on-year during July-December 2021 while exports grew 25%.

According to a statement issued by the Ministry of Commerce, exports amounted to $15.125 billion for July-December 2021 against the target of $15 billion.

The statement was issued following a consultative meeting chaired by Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood to discuss the trade trend in December 2021.

The meeting discussed that trade deficit was likely to come down if parliament passed the mini-budget as it would discourage imports following imposition of higher taxes on luxury items.

“Import growth is likely to be reduced along with import value with the resumption of International Monetary Fund (IMF) programme,” the statement added.

“Reduction in trade deficit in the coming months is imminent due to a stringent ongoing review and the checks put in place by financial support providers.”

Talking to The Express Tribune, Arif Habib Limited analyst Sana Tawfik said that imports increased 63% year-on-year during July-December 2021 while exports grew 25%.

The trade deficit almost doubled during the six months under review compared to the same period of last year.

“Imports are expected to slow down on the back of a forecast decline in international commodity prices,” she said. “Keeping in view the measures taken by the government to incentivise export-oriented sectors, we are optimistic that outward shipments will improve further in the coming months.”

She voiced hope that the country would achieve the export target for full fiscal year 2021-22.

Centre for Peace and Development Initiatives (CPDI) CEO Mukhtar Ahmad Ali stated that exports were increasing at a slow pace partly due to a significant increase in commodity prices in global markets.

Exports had remained suppressed until 2018 because of severe energy shortages and the impact of terrorism on the industry, he recalled.

“Following normalisation of energy supply and improvement in law and order situation, exports were expected to jump significantly but it seems that political uncertainty and soaring energy prices have affected investor confidence,” said Ali. “The ongoing gas supply constraints are likely to dent exports.”

He added that additional efforts were needed to increase the range, quantity and value of exportable goods and services.

Arif Habib Commodities CEO Ahsan Mehanti said that the trade deficit had doubled on a year-on-year basis in July-December 2021, therefore Pakistan’s trade performance was unsatisfactory.

However, the export target was met for the half year and the annual target was also likely to be reached due to the expected low impact of Omicron variant of coronavirus on global growth and Pakistan’s exports, he said.

[Riaz Haq]

One of the major initiatives of the government to encourage imports of raw materials also pushed up the import bill. Oil prices have also increased substantially, which pushed up the import bill because of the high demand for energy in the domestic market. A surge was noted in imports of vehicles, machinery as well as vaccines, pushing the import bill.

In FY21, the import bill surged by 25.8pc to $56.091bn from $44.574bn the previous year.
--------

Exports posted year-on-year growth of 24.71pc to $15.102bn in July-December 2021. In December 2021, exports saw a growth of 15.8pc to $2.740bn from $2.366bn in the same month last year. On a month-on-month basis, exports declined by 5.55pc in December.

Export proceeds went up by 18.2pc to $25.294bn in FY21 from $21.394bn over the last year.

According to the commerce ministry, the exports of fish & fish products, plastics, cement, fruits & vegetables, petroleum products, natural steatite, etc increased. In terms of market diversification, there was an increase in exports to Bangladesh, Thailand, Sri Lanka, Malaysia, Kazakhstan, South Korea, etc.

In the traditional sectors, there was an increase in the exports of men’s garments, home textiles, rice, women’s garments, jerseys & cardigans and T-shirts. However, exports of fruits & vegetables, surgical instruments, electrical & electronic equipment, tractors, pearls and precious stones decreased in December 2021 as compared to the same month last year.


https://www.dawn.com/news/1667861/trade-deficit-widens-106pc-in-jul...



--------------

Arif Habib Limited
@ArifHabibLtd
Country posted highest ever textile exports for the month of Dec.

Dec’21: $ 1.64bn, +17% YoY, -6% MoM
1HFY22: $ 9.40bn, +26% YoY

https://twitter.com/ArifHabibLtd/status/1480415138108870656?s=20

[Riaz Haq]

Shafaat Hussain
@sshabdali
Textile exports in Dec-21 have reached $1.62bn. During Jun-Dec 2021, #Pakistan has achieved $9.38bn, that's an increase of $2.73bn compared to H1FY18 and $1.93bn compared to H1FY21.
This year we are all set to make a new all-time high of $20bn, InshaAllah.

https://twitter.com/sshabdali/status/1483070013816848384?s=20

[Riaz Haq]

Muzzammil Aslam
@MuzzammilAslam3
پاکستان کی تاریخ کی بلند ترین مشینری میں سرمایہ کاری 2021 . مسلم لیگ ن کے پہلے تین سال اور پی ٹی آئ کی پہلے تین سال سرمایہ کاری میں واضع فرق۰ الحمد اللہ!
Translated from Urdu by
Investment in the highest machinery in the history of Pakistan 2021. There is a clear difference between the first three years of PML-N and the first three years of PTI. Praise be to Allah!

https://twitter.com/MuzzammilAslam3/status/1485163856636911617?s=20

[Riaz Haq]

Riaz Haq
@haqsmusings
Replying to
@kaiserbengali
@Asad_Umar
is right! #Pakistan must grow its #exports to deal with its current account imbalances. Meanwhile, please note that Pakistan #textile exports are rapidly changing from yarn and cloth to higher value-added #garments. Also growing #tech #exports by double digits.

https://twitter.com/haqsmusings/status/1485278540568268801?s=20