Pakistan needs to exploit textile value addition potential

AHORE: Pakistan needs to exploit its value addition potential in textiles to bring it at par with the regional competitors, as China generates textile exports of $14.7 from one pound of cotton, Bangladesh $13.31, India $2.96 and Pakistan only $2.46, experts say.

 

“Let us be realistic in admitting that the market access is not the only issue that is impeding our textile exports; low value addition is a greater issue,” All Pakistan Textile Mills Association (Aptma) leader Gohar Ejaz said.

 

Bangladesh edged out Pakistan because of lucrative market access but India and China export their textile products at same duties as levied on Pakistan; still they generate higher revenues per pound of cotton used, he said.

 

China is the largest consumer of cotton in the world. In 2012 its mills consumed 7.838 million tons of cotton to generate textiles and clothing exports of $254 billion, Ejaz said, adding that Pakistan being the third largest consumer of cotton processed 2.395 million tons of cotton but its exports were restricted to $13 billion only.

 

Had Pakistan achieved the same value addition as achieved by China its exports would have been $77 billion, he said, adding that Pakistan is operating much below its textile exports potential.

 

Bangladesh processed only 0.738 million tons of cotton, of which almost one-thirds consumed by Pakistani mills, yet its exports in 2012 were much higher at $23 billion. At Bangladesh’s value addition level, Pakistan’s exports should have been $70 billion, he added.

 

“We want every inch of yarn and every yard of fabric produced in Pakistan to be consumed locally for value addition,” Aptma Punjab Chairman S M Tanveer said.

 

Currently, he said, Pakistan is exporting large quantities of these products to the competing economies that add value to Pakistani yarn and fabric and earn many times more than Pakistan through exports.

 

He said that to make up for the lost time, Aptma is moving on a fast-track basis and needs government’s facilitation.

 

“We are way behind our competitors in cotton production, in textile marketing and lobbying in the developed economies,” he said, adding that in 1991-92, Pakistan and India were almost at par in cotton production with Pakistan producing 2.2 million tons against 2.3 million tons cotton produced by India.

 

China at that time was producing 4.5 million tons of cotton, he said. “Two decades latter in 2012-13, our production was slightly lower at 2.1 million tons, while Indian cotton production jumped to 6.2 million tons and China is at 7.6 million tons,” he added.

 

He said India has doubled it per hectare cotton productivity in two decades, while Pakistan’s per hectare cotton production remained stagnant at 704kg. China, he said, obtains 1,387kg of cotton from one hectare of land.

 

Aptma has now actively joined in to facilitate research on cottonseeds, as its members contribute Rs650 million as cotton cess.

 

He said cotton yield could be increased in the short-term to 1,000kg per hectare that could take the total cotton production beyond three million tons.

 

Tanveer said that after the grant of GSP Plus status, Pakistan will have to accelerate value addition in textiles, adding that intense lobbying in United States and the European Union is needed for which Aptma is organising road shows in these two markets.

 

Since the present government is receptive to genuine demands of exporters, Aptma is lobbying for removal of six percent import duty on polyester fibre imports and three percent duty on PTA import, which will bring in line the government policy of zero-rated imports and exports of cotton, the main fibre used in textiles, he said.

 

Aptma Punjab Senior Vice Chairman Ali Ahsan said that Pakistan is among the few economies of the world that represents complete textile value chain.

 

Pakistan produces its basic raw material of cotton and manmade fibre, the PTA. He said it has state-of-the-art spinning industry that produces cotton and blended yarn.

 

“It’s weaving, knitting and processing industries produce weaved and knitted fabrics and home textiles,” he said.

 

“With all basic ingredients of textiles available, we only need fine tuning of our production and marketing techniques to leap forward,” he added.

 

According to World Trade Organization (WTO) statistics, Pakistan, China, India and Bangladesh generated cumulative exports of $322 billion in 2012, which was 45 percent of the total global textiles and clothing exports of $722 billion.

 

As per the United States Development Agency (USDA) statistics, these four economies consumed 68 percent, or 15.9 million tons, of the total cotton consumed in 2012.

Source: The NEWS

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