By Kazim Alam, The Express Tribune
KARACHI: Although Pakistan’s textile and apparel exports to the United States are expected to have risen by 3% in 2011 in terms of dollar amount, a decline of 18% in volumes is expected over the same period, according to a study conducted by the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA).
In 2010, apparel exports to the US increased by 14% in value and 9% in volume, the study said. Similarly, the rise in non-apparel textile exports in the same period was 9% in value and 5% in volume, it stated, adding the drop in volumes in 2011 was mainly due to the hike in the cost of raw materials.
Pakistan’s apparel exports to the US are 49% of its total textile exports, which is lower than India (58%), Bangladesh (97%), China (73%) and Vietnam (93%).
“Even though our apparel exports to the US are lower than our regional competitors in terms of share in total textile exports, it doesn’t necessarily mean we’re totally lagging behind in value-added products,” said PRGMEA Research Officer Ibrahim Mahmood while talking to The Express Tribune. “Bed linen is a value-added product that we export to the US. We export fabric as well, which is also a semi-value-added product.”
In terms of value, apparel and non-apparel exports to the US are expected to have increased by 6% and 1%, respectively, in 2011. In terms of volume, however, apparel and non-apparel exports are likely to have declined by 15% and 19%, respectively, over the same period.
The study also said exports to the US rely heavily on cotton as the primary raw material because 94% of the country’s total textile exports are cotton-based. This is significantly higher than India (80%), Bangladesh (79%), China (48%) and Vietnam (57%).
According to PRGMEA estimates, the export of cotton-based products to the US in 2011 is expected to have increased by 2% in value while their quantities are likely to have declined by 21%.
“The market for manmade fibre products is expected to grow tremendously in coming years as opposed to cotton-made products. Our exporters must set their priorities according to the changing global trends,” Mahmood said, while referring to the estimated rise of 38% in the value of manmade fibre products exported in 2011, which accounted for just $126 million in the preceding year.
The report suggested that Pakistan’s textile and apparel exporters should diversify their exports and sell a higher number of value-added goods, preferably in the non-cotton segment.
Terming the American tariff regime “unfair,” the study called for a free trade agreement with the US. Currently, tariff revenue that the US generates from Pakistan’s textile exports is equal to the amount it generates from France’s $37 billion exports, it said.
Published in The Express Tribune, January 24, 2012.