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Pakistani T&C exports to US not growing at desired pace
Feb '12
The United States of America is one the largest markets for textile and clothing (T&C) products from Pakistan. Although the US market is currently going through turbulent times due to the financial crisis, the retail figures indicate steady sales in 2011.

Although US import figures for 2011 are not released as yet, Pakistan's textile and apparel exports to the US are expected to increase by 3% in terms of value but the quantities are expected to go down by 18% in 2011, signifying growth primarily due to price inflation in raw materials cost.

Figures reveal that Pakistan has a well diversified product portfolio. Pakistan's apparel exports to US are 49% of its total textile exports. While the products are well diversified, Pakistan's exports to US seem to be overly reliant on cotton as the principle raw material.

94% of Pakistan's total textile exports are cotton based. In contrast products made from non-cotton based raw materials such as wool comprise only 2% of Pakistan's exports to US, man-made fiber based constitute 4% and silk & vegetable fiber based products comprise only 0.1%.

During 2010, Pakistan's apparel exports to the US increased by 14% year-on-year in value and 9% in terms of quantities. While non-apparel exports increased by 9% in value and 5% in quantity.

In comparison, India's apparel exports to US increased by 9% in value and 1% in quantity. India's non-apparel exports made substantial gains, increasing by 29% in value and 25% in quantity.

Bangladeshi apparel exports remained strong growing by 15% in value and 16% in terms of quantity. Bangladesh also managed to gain a sizeable share in non-apparels. China and Vietnam too posted solid growth in both categories.

For the year 2011, it is expected that Pakistan's apparel exports to the US will increase by 6% in value, while non-apparel exports are expected to increase by 1%. In terms of quantity, apparel exports will decline by 15%, while non-apparel export quantities are expected to decline by 19%.

Cotton based products are expected to increase by 2% in value, while quantity will go down by 21%. Pakistan's major export products to US, such as men's/boys knit shirts, cotton hosiery, men's/boys cotton trousers are expected to increase; substantial gains are expected in man-made fiber products, too. Although the quantum value of these products is very small, just $126 million in 2010, around 38% increase is expected in 2011.

Pakistan's textile and garment exports to the US are clearly not growing at the desired pace, at least in the major categories. Our regional competitors are steadily increasing their share in the US import market. Although, growth in man-made fiber products is commendable but as the quantum is very small, it will have no visible effect on our overall exports.

While, Vietnam and Bangladesh are gaining major share in apparel sector, India is steadily gaining in the home textile sector. In order to stem this decline, Pakistan's textile and garment exporters need to further diversify their exports to more value-added products, preferably in non-cotton products.

Pakistan also needs to step-up its trade diplomacy in order to do away with unfair tariff regime. A Free Trade Agreement (FTA) with USA would be highly beneficial.


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Courtesy: Reliance Industries

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