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Rep Rev Textiles an 200 Ministry of Te Research, Dev H.627, Street 9 PAKISTAN Ph: +92 51 925 Fax: +92 51 92 Email: info@rd Website: http: port: 2.OTR-08/02- 5YTA vised 01, January 26, 2008 nd Clothing Tra 02-07 extile Industry velopment and Advisory Cell 95, I-8/4 Islamabad 59179 257321 dacell.com ://www.rdacell.com ade

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Page 1: Textiles and Clothing Trade - :: RDA Cell Ministry of ...€¦ · Textiles and clothing have maintained a share of over 60% in Pakistan’s total exports. The transition to a quota

Report: 2.

Revised 01, January 26

Textiles and Clothing Trade

2002

Ministry of Textile

Research, Development and Advisory Cell

H.627, Street 95, I

PAKISTAN

Ph: +92 51 9259179

Fax: +92 51 9257321

Email: [email protected]

Website: http://www.rdacell.com

Report: 2.OTR-08/02- 5YTA

Revised 01, January 26, 2008

Textiles and Clothing Trade

2002-07

Textile Industry

Research, Development and Advisory Cell

H.627, Street 95, I-8/4 Islamabad

Ph: +92 51 9259179

Fax: +92 51 9257321

[email protected]

http://www.rdacell.com

Textiles and Clothing Trade

Page 2: Textiles and Clothing Trade - :: RDA Cell Ministry of ...€¦ · Textiles and clothing have maintained a share of over 60% in Pakistan’s total exports. The transition to a quota

Disclaimer

All data represented in this study is provided by Federal Bureau of Statistics except some for which the

sources are indicated.

MINTEX is not responsible for the correctness of the data source. The representation of the data is

solemnly for analysis purpose. It is not intended to provide any focused derivations favoring or

otherwise individual or group.

This Data, Research and Analysis are the intellectual property of Research, Development and Advisory

Cell of MINTEX. The usage of such data and analysis in other reports would require prior permission

from the Secretary, Ministry of Textiles Industry.

Contact:

2nd Floor, FBC Building

G-5/2, Islamabad

PAKISTAN

Email: [email protected]

Phone: +92 51 9203346

Fax: +92 51 9203345

ISLAMABAD

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Contents

1 Foreword ............................................................................................................................................... 1

2 Introduction ........................................................................................................................................... 3

3 Pakistan’s Top Export Destinations and Products ................................................................................. 6

3.1 Export Products ............................................................................................................................. 6

3.2 Average Unit Price ......................................................................................................................... 7

3.3 Export Destinations ....................................................................................................................... 7

4 Imports .................................................................................................................................................. 9

5 Category-wise Performance ................................................................................................................ 11

5.1 Raw Cotton .................................................................................................................................. 12

5.1.1 Trade Flow and Product Mix ............................................................................................... 13

5.2 Cotton Carded or Combed .......................................................................................................... 14

5.2.1 Exports ................................................................................................................................. 14

5.2.2 Imports ................................................................................................................................ 15

5.3 Yarn ............................................................................................................................................. 15

5.3.1 Exports ................................................................................................................................. 15

5.3.2 Imports ................................................................................................................................ 19

5.4 Yarn Other than Cotton ............................................................................................................... 20

5.4.1 Product Mix ......................................................................................................................... 20

5.4.2 Trade Partners ..................................................................................................................... 21

5.5 Cotton Cloth ................................................................................................................................ 22

5.5.1 Exports ................................................................................................................................. 22

5.5.2 Export Mix ........................................................................................................................... 24

5.5.3 Imports ................................................................................................................................ 25

5.6 Synthetic Textiles and clothing .................................................................................................... 26

5.6.1 Regional Diversification ....................................................................................................... 26

5.6.2 Top Traded Commodities .................................................................................................... 27

5.7 Knitwear ...................................................................................................................................... 28

5.7.1 Export Destinations ............................................................................................................. 30

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5.7.2 Imports ................................................................................................................................ 31

5.8 Readymade Garments ................................................................................................................. 32

5.8.1 Export destinations ............................................................................................................. 32

5.8.2 Export Mix ........................................................................................................................... 33

5.8.3 Imports ................................................................................................................................ 34

5.9 Bed-wear ..................................................................................................................................... 35

5.9.1 Exports ................................................................................................................................. 35

5.9.2 Imports ................................................................................................................................ 37

5.10 Towels ......................................................................................................................................... 37

5.10.1 Exports ................................................................................................................................. 37

5.10.2 Imports ................................................................................................................................ 39

5.11 Tents, canvas and Tarpaulins ...................................................................................................... 39

5.11.1 Exports ................................................................................................................................. 39

5.11.2 Imports ................................................................................................................................ 40

5.12 Other Made-ups .......................................................................................................................... 41

5.12.1 Exports Destination ............................................................................................................. 42

5.12.2 Imports ................................................................................................................................ 43

5.13 Other Textiles and clothing Materials ......................................................................................... 44

5.13.1 Regional Diversification ....................................................................................................... 45

5.13.2 Top Traded Products ........................................................................................................... 45

6 Conclusion ........................................................................................................................................... 48

7 Recommendations .............................................................................................................................. 49

7.1 Raw Materials .............................................................................................................................. 49

7.2 Spinning ....................................................................................................................................... 49

7.3 Weaving ....................................................................................................................................... 49

7.4 Processing .................................................................................................................................... 50

7.5 Apparels and Made-ups .............................................................................................................. 50

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Textiles and Clothing Trade 2002-07

Foreword 1

1 Foreword

Pakistan’s exports have been dominated by cotton and cotton based textiles and clothing. This historical

dependence on textiles and clothing as the major export earning sector was highlighted even in the

Pakistan Trade Policy review conducted by the World Trade Organization (WTO) in January 2008. The

report notes that “Pakistan still lags behind in export diversification, still depending heavily on textiles

and clothing, which account for two thirds of total exports. This sector now faces stronger competition

in major markets”.

While export diversification is a pre-requisite for economic growth and expansion and is the focus of the

Export Plan already approved by the Government, textiles and clothing will continue to remain the

single most important sector to sustain export earnings and facilitate investment for diversification.

There is the need, therefore, for an even sharper focus on the health of the textiles and clothing

industry to face competition and the ever-growing challenges posed by the integration of the textiles

and clothing trade into the General Agreement on Tariffs and Trade (GATT) 1994.

The transition of this sector from the restrictive quota regimes under the Short Term Arrangement and

the Long Term Arrangement of the 60s and the Multi Fiber Arrangement from 1974 to 1994, to another

ten years under the WTO Agreement on Textiles and clothing (ATC) has been painful and exacting for

countries like Pakistan. The quota regimes effectively restricted the growth potential based on the

comparative advantages of home grown cotton, an abundant supply of labor and cheaper cost of

production.

Several reports produced by international organizations, including the WTO, categorized Pakistan as one

of the major winners in post quota scenario. However the elimination of quotas in 2005 opened the

trade to fierce competition.

To be able to secure and expand market share some countries were positioning themselves through

investment in technology, increasing production base and productivity. Exporters attaining overall

competitive edge from investments and those who gained form lower costs, either through increased

productivity or excellence in craftsmanship, marketing, designs, brands and better supply chain

management came out as winners.

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Textiles and Clothing Trade 2002-07

Foreword 2

It is in this backdrop that the Ministry of Textile Industry created a Research, Development and Advisory

Cell to undertake analyses of the Textiles and clothing sector, receive feedback from the stakeholders

and advise the Ministry on policy options. Accordingly, the second report being released now shows

trends of Pakistani textiles and clothing exports during the last five years. (An analysis of the Research

and Development Support for the textiles and clothing sector introduced in 2005, has already been

prepared and released to the industry).

It is our hope that the reports will be carefully analyzed by the stakeholders. Their feedback will greatly

facilitate the Ministry and the Government to tackle some of the serious issues confronting the sector in

the overall context of the export-led growth strategy.

Secretary, Ministry of Textile Industry

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Textiles and Clothing Trade 2002-07

Introduction 3

2 Introduction

Textiles and clothing continue to represent the most important manufacturing sector of Pakistan. The

increase in export earnings has been directly proportionate to the growth of this sector. Investment

incentives and export facilitation has also focused on this sector.

Global environment of textiles and clothing trade has undergone radical changes from a highly

restrictive quota regime. Spanning over more than half a century, the trade is now under regular GATT

1994 disciplines.

This report intends to analyze Pakistan’s export during the last three years of quota regime (2002-2005)

and trends emerging with elimination of quantitative restrictions i.e. 2006-07. As demolition of quota

regime is changing characteristics of international trade patterns, this report will focus on Pakistani

textiles and clothing exports and imports and their characteristics in terms of product diversification,

regional diversification and value addition.

To place these trends in their correct perspective, it would be essential to look at a thumb nail sketch of

trends in some of the major textiles and clothing producers in the region and their share in global

markets.

Following table gives an overview of the global and regional textiles and clothing trade including

Pakistan.

Table 1: Comparison with Asian Competitors for Textiles and clothing Exports (US$ Million)

2002 2003 2004 2005 2006 Total

Growth

Share in

2006

Rank in

2006

World

362,011

408,699

456,110

483,106

530,004

46.41%

100.00%

China

61,864

78,961

95,284

115,213

144,071

132.88%

27.18%

1

India

12,065

13,471

13,641

17,674

19,522

61.81%

3.68%

4

Pakistan

7,018

8,521

9,151

10,691

11,376

62.10%

2.15%

10

Bangladesh

4,580

5,480

6,893

8,447

9,850

115.07%

1.86%

13

According to WTO statistics1 Pakistan has been able to increase its share in global trade from 1.94% to

2.15% in textiles and clothing trade in volumes. Pakistan also improved its ranking from 14th to 10th with

a compound growth of 12.84% per annum. However the market share decreased to this level after

achieving 2.21% in the preceding year which was quota protected. China, which is the largest exporter

of textiles and clothing, in spite of the quotas imposed by the European Union and the United States

between 2002 and 2006, gained an additional 10 per cent and now accounts for 27 per cent of the world

1 To have similar time periods for comparison, data from WTO has been used.

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Textiles and Clothing Trade 2002-07

Introduction 4

Raw Cotton, 0.47%Cotton

Carded/Combed, 0.15

%

Cotton Yarn, 13.24%

Yarn Other Than

Cotton, 0.62%

Cotton Cloth, 18.78%

Synthetic

Textiles, 3.89%

Bedware, 18.50%Towels, 5.58%

Knitwear, 18.17%

Readymade

Garments, 12.84%

Tents/Canvas, 0.64%

Other Made-

ups, 4.37% Other Textiles, 2.75%

textiles and clothing exports. The increase in volume was impressive i.e. more than 24% compound

growth per annum.

Bangladesh compound growth per annum was more than 21% in the same period and it jumped 8

places from 21 to 13 in world ranking.

India with a compound growth rate of 12.78% per annum went up from 8th to 4th while Turkey which

ranked 6th in 2002, improved its standing to 5th with a compound growth of 12.17% per annum. Their

share in 2006 was 3.68% and 3.67%, respectively.

As far as product mix is concerned; China, India and Bangladesh had 64%, 52% and 91% share of clothing

respectively in their product mix whereas Pakistan’s share was below 32% for clothing in overall textiles

and clothing exports.

With high percentage of low value added products in the product mix, Pakistan has not been able to

diversify destination-wise as well. Pakistan’s textiles and clothing exports have traditionally targeted the

Quad markets, including America, Europe and Canada. The high dependence on these destinations was

basically because of the large market size, the comparative advantage that Pakistan had and the

introduction of Quantitative restrictions (QRs or Quotas) in these markets mostly through the Multi

Fiber Arrangement (MFA). In comparison, Pakistan’s exports to non-quota, nontraditional markets did

not show substantial growth till the early 90s.

Figure 1: Product Mix of Pakistan 2006-07

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Textiles and Clothing Trade 2002-07

Introduction 5

In the backdrop of our traditional export pattern, North America and Europe have remained our top

export destinations, and their combined share has increased from about 64% to more than 72% in the

last 5 years.

Figure 2: Export Destinations Region-wise

Exports to Europe, North America and South America grew at a compound rate of 13.54%, 37.14, and

13.56% per annum, respectively. However exports to Asian, African and Oceania destinations have

remained almost stagnant. However exports towards Asia, Africa and Oceania have remained almost

stagnant.

The dip during 2006-07 in North American markets is an evidence of increasing competition after

dismantling of quotas.

Textiles and clothing have maintained a share of over 60% in Pakistan’s total exports. The transition to a

quota free regime notwithstanding, the value of textiles and clothing exports has increased consistently

during 2002-07 as reflected by the table below;

Table 2: Pakistan’s Textiles and clothing Export (Million US$)

2002-03 2003-04 2004-05 2005-06 2006-07

Million US$ 7,378.03 8,079.08 9,005.39 10,195.00 10,901.25

Change from Last Year 9.50% 11.47% 13.21% 6.93%

Share in Pakistani Total Exports 63.89% 63.43% 60.49% 61.97% 64.08%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2002-03 2003-04 2004-05 2005-06 2006-07

North America

Europe

Asia

Africa

South America

Oceania

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Textiles and Clothing Trade 2002-07

Pakistan’s Top Export Destinations and Products 6

3 Pakistan’s Top Export Destinations and Products

3.1 Export Products

It is interesting to note that despite the overall growth in exports of textiles and clothing during period

under review, a dip in growth and/or the growth rates is evident in almost all categories for the year

2006-07.

Cotton Cloth has remained the top export category during the last five years. Bedwear and Knitwear

have maintained 2nd and 3rd rank, respectively. Readymade Garments, the most value added category

has grown with a compound rate of 7.06% per annum however it has lost its 4th rank to the basic textiles

and clothing industrial commodity i.e. cotton yarn and is ranked 5th despite of having R&D support of 6%

in major countries.

Figure 3: Trade Volume Category Wise

0

500

1,000

1,500

2,000

2,500

2002-03 2003-04 2004-05 2005-06 2006-07

Cotton Cloth

Bed wear

Knitwear

Cotton yarn

Readymade Garments

Towels

Other Made-ups

Synthetic Textiles

Other Textile Materials

Tents/Canvas

Other yarns

Cotton

Cotton Carded/Combed

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Textiles and Clothing Trade 2002-07

Pakistan’s Top Export Destinations and Products 7

An important characteristics of Pakistan’s textiles and clothing exports and the destinations is that our

competition consumes bulk of the raw material exports whereas higher value added finished products

have a niche in the developed importing countries. Europe with its strong processing base also remained

a major destination for certain types of fabrics etc. The following table highlights this trend;

Figure 4: Regional Share for 2006-07

3.2 Average Unit Price

Table 3: Average Unit Price (US$/Square Meter Equivalent)

2002-03 2003-04 2004-05 2005-06 2006-07 Representation

Average (Category wise) 0.624 0.658 0.727 0.739 0.810 88%

Average (Tariff line wise) 0.801 0.901 0.701 0.772 0.708 41%

The above table reflects random average unit values and does not intend to analyze the values of each

category and its sub category on individual actual export price.

3.3 Export Destinations

As far as diversification by country is concerned, more than 71% of our textiles and clothing exports are

limited to 10 destinations only. The share of these countries has increased from about 64% during last 5

years.

0102030405060708090

100

Africa

Oceania

South America

North America

Europe

Asia

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Textiles and Clothing Trade 2002-07

Pakistan’s Top Export Destinations and Products 8

Table 4: Top 10 Export Destinations (Value in Million US$)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07

United States

2,271.23

2,576.87

3,059.25

3,850.17

3,874.39

United Kingdom

582.83

702.45

642.36

658.47

745.79

Hong Kong

423.20

471.66

463.49

568.91

527.29

Germany

399.59

412.93

458.21

487.30

520.38

Italy

217.33

281.45

365.62

434.77

483.66

China

159.44

203.39

219.29

326.10

400.01

Spain

152.84

206.53

246.46

314.58

356.73

Turkey

114.44

186.19

218.00

250.78

325.26

Netherlands

188.09

237.51

244.31

267.81

293.27

Belgium

164.78

184.65

235.21

244.64

291.41

The United States is the largest export market and during last five years, exports to United States have

increased at the compound rate of 14%. However the growth was only 0.6% in post quota year.

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Textiles and Clothing Trade 2002-07

Imports 9

4 Imports

Trade balance for textiles and clothing products has always remained in favor of Pakistan. However, in

the past few years imports have increased with a compound growth of almost 29% per annum.

Table 5: Total Textiles and clothing Imports (US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07

Million US$ 595.00 987.87 1,064.26 1,322.47 1,631.23

66.03% 7.73% 24.26% 23.35%

Import of raw materials has been growing to meet the supply & demand gap and increasing

consumption of our expanding textiles and clothing industry. Pakistan is the fourth largest producer of

cotton; however the consumption of our spinning industry has surpassed local production. Our cotton

crop is also deficient in long and extra long staples, which is the basic requirement for value added

products. Pakistan’s Man Made Fiber manufacturing base is also narrow and many varieties of Man

artificial fibers are also not produced locally.

Two varieties of cotton top the chart of imported textiles and clothing commodities. The combined

share of these two varieties is more than 38% and they have double digit compound growth of 36% and

20% during the last four years respectively.

Table 6: Top 10 Imported Commodities

2002-03 2003-04 2004-05 2005-06 2006-07 Share Growth

OTHER COTTON 132.80 343.24 244.06 247.97 454.10 27.84% 241.95%

COTTON, AMERICAN 84.32 154.45 233.84 87.24 174.27 10.68% 106.67%

ART-STA FIB VIS RAYON N-

CRD/CO

45.19 51.40 72.23 101.88 81.26 4.98% 79.84%

FILAMENTS YARN OF POLYESTERS 17.50 28.13 34.12 72.25 70.93 4.35% 305.45%

WORN CLOTHING&OTH WORN

ARTICLE

36.83 34.91 39.80 47.61 56.12 3.44% 52.37%

SYN FIB NOT CRD/COM<2.22DECX 0.00 0.00 4.77 54.77 55.15 3.38% #DIV/0!

OTH S-YARN,POLYE 50

TURNS/MTR

21.49 25.80 30.13 63.17 49.98 3.06% 132.57%

OTH JUTE&OTH TEXTILES AND

CLOTHING BAST FIB

10.45 19.41 29.28 32.10 36.76 2.25% 251.60%

OTH Y/S UN-TWST VISCOSE

RAYON

10.45 12.40 13.53 27.82 32.00 1.96% 206.19%

OTH FAB 85% OR MORE DYED 6.57 13.48 10.74 34.69 29.60 1.81% 350.73%

The top 10 commodities have a share of more than 63% of our total import bill for textiles and clothing

products, 95% of which are raw materials.

Asian countries are the main source of import of raw materials, fiber (Cotton and MMF) and chemicals.

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Textiles and Clothing Trade 2002-07

10

Table 7: Imports of raw materials (US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Share Growth

Asia 327.3909 530.3648 487.3777 848.7956 1062.235 65.12% 224.45%

North America 120.4871 195.2939 274.7618 126.6155 222.5713 13.64% 84.73%

Europe 91.87173 132.6525 111.7397 138.4245 155.6799 9.54% 69.45%

Africa 37.34867 92.5887 120.6345 98.19943 107.7153 6.60% 188.40%

South America 1.811767 5.087617 46.50797 92.42325 64.29432 3.94% 3448.71%

Oceania 16.0936 31.8815 23.23702 18.013 18.73015 1.15% 16.38%

China and India are the top suppliers; the China-Pakistan Free Trade Agreement provides added

incentives for import of raw materials from China.

Table 8: Top 10 Import Sources (US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Share Growth

China 43.83 59.46 80.80 226.40 326.64 20.02% 645.31%

India 1.37 63.16 22.21 59.72 245.23 15.03% 17776.42%

United States 112.63 186.20 260.91 112.72 209.13 12.82% 85.68%

Other Asian Countries 43.83 45.84 48.08 68.95 64.38 3.95% 46.90%

Brazil 0.87 4.31 44.27 91.26 62.37 3.82% 7038.68%

Thailand 27.95 39.38 50.88 112.20 60.55 3.71% 116.61%

Korea, Republic of 38.94 48.90 42.95 80.33 54.24 3.32% 39.28%

Bangladesh 20.19 28.55 37.66 42.39 49.09 3.01% 143.10%

Indonesia 31.76 28.37 35.91 64.82 47.78 2.93% 50.45%

Egypt(U.A.R.) 13.86 14.41 47.88 46.29 33.98 2.08% 145.17%

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Textiles and Clothing Trade 2002-07

Category-wise Performance 11

5 Category-wise Performance

Textiles and clothing products comprising 884 product lines have been placed in 13 major groups. The

report uses this criterion for trade analysis of textiles and clothing items. The description of the groups is

as follows:

1. Raw Cotton: This category includes three 8 digit HS Codes i.e. 52010010, 52010020 and

52010090.

2. Cotton, Carded and/or Combed: This category includes only one tariff line i.e. 52030000

3. Cotton Yarn: This category comprises of ‘46’ 8-digit HS codes all of which fall under Chapter 52.

4. Yarn other than Cotton: This category comprises of ‘77’ 8-digit HS codes which fall under

Chapter 50, 51, 53, 54 and 55

5. Cotton Cloth: This category comprises of ‘86’ 8-digit HS codes most of which fall under Chapter

52 while few under Chapter 58.

6. Synthetic Textiles and clothing: This category is also called Art, Silk and Synthetic Textiles and

clothing however it only includes fabric of man-made fiber and filament. The category comprises

of ‘110’ 8-digit HS codes which fall under Chapter 54, 55 and 58.

7. Knitwear: This category comprises of ‘116’ 8-digit HS codes most of which fall under Chapter 61.

It includes one tariff line of Chapter 62 i.e. “62101000 Garments made up of fabrics of heading

56.02, 56.03 (nonwovens)”.

8. Readymade Garments: This category comprises of ‘127’ 8-digit HS Codes most of which fall

under Chapter 62. However it includes 4 tariff lines of Chapter 61 i.e. 61171000, 61172000,

61178000 and 6117900 (Other made up clothing accessories, knitted or crocheted; knitted or

crocheted parts of garments or of clothing accessories)

9. Bed wear: Bed-wear category falls under Chapter 63 and comprises of ‘18’ 8-digit HS Codes

10. Towels: This category only includes mill-made towels which are traded under one 8-digit HS-

Code i.e. 63026010

11. Tents, Canvas and Tarpaulin: This category falls under Chapter 63 and comprises of ‘14’ 8-digit

HS Codes

12. Other Made-ups: This category includes made-ups other than towel and bed-wear. The category

comprises of ‘35’ 8-digit HS Codes most of which fall under Chapter 63. Nine(9) of the product

lines fall under chapter 56 which include sanitary towels and tampons; napkins; nappies, diapers

and other articles of wadding; and textiles and clothing flock and dust.

13. Other Textiles and clothing Products: This category includes rest of all textiles and clothing items

traded under Chapter 50-63 excluding Chapter 57 (Carpets and other textiles and clothing floor

coverings). This category comprises of ‘250’ tariff lines.

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Textiles and Clothing Trade 2002-07

Category-wise Performance 12

5.1 Raw Cotton2

On 14th August, 1947, Pakistan inherited a small industrial base. The share of textiles and clothing sector

was nearly non-existent. Though the areas following with Pakistani borders produced about 1.1 million

bales of cotton, the industrial consumption was only 78,000 bales. By default, therefore, Pakistan

became a major cotton exporting country with 90% of its production finding markets abroad. India, on

the other hand, was consuming around 4.4 million bales, importing nearly 50% of its requirement.

The Government of Pakistan introduced several policy measures for the industry providing incentives of

soft loans, relaxation in taxation, availability of cheaper cotton by levying export duties on raw cotton

etc. for establishing spinning units to increase cotton consumption and producing cloth and other value

added textiles and clothing products.

Resultantly, the spinning capacity increased over the years and, from 1.45 million bales in 1960, it grew

to 11.2 million in 2002. In 2007-08 total domestic consumption of cotton is estimated to be in between

15 to 16 million 170 kgs bales.

To meet the growing demand of the spinning sector, new farm technologies were adopted and

production of cotton also increased however the production of long and extra long staple varieties of

cotton continued to elude Pakistani agriculture.

The demand for long and extra long staple Pakistan was met through imports since 1993-94 but since

2001 Pakistan is importing cotton variety of shorter staple as well due to the increased gap between

local consumption and farm production. To keep up with the growing demands Pakistan has now

become a net importing country of cotton which is evident from the following table.

Table 9: Exports/Imports of Cotton3

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity Exported (Million KG) 55.1 37.31 117.08 62.66 45.07 -18%

Quantity Imported (Million KG) 188.5 385 387.74 346.39 461.11 145%

Net Trade Flow (Million KG) -133.4 -347.69 -270.66 -283.73 -416.04 212%

Exports (Million US$) 47.88 45.69 109.15 68 50.8 6%

Imports(Million US$) 226.87 507.76 515.79 372.92 653.89 188%

Net Trade Flow (Million US$) -178.99 -462.07 -406.64 -304.92 -603.09 237%

2 The trade of raw cotton has been analyzed using three 8 digit HS Codes i.e. 52010010, 52010020 and 52010090.

3 Cotton trade share in Pakistan’s export mix has declined from 0.65% to 0.47% during 2002-03 and 2006-07 while

has increased in import mix from 38.13% to 40.09% during the same time period.

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Category-wise Performance 13

In 2004-05, Pakistan had a bumper production of 14.3 million bales of cotton, more than the demand of

the local spinning industry due to which the net flow improved however, the gap increased again in

2006-07 due to increased demand and lesser production.

5.1.1 Trade Flow and Product Mix

Pakistan’s export destination for cotton is mainly Asian markets which account for more than 99% with

Indonesia, Bangladesh, and Thailand being the major importers during the last 5 years.

Table 10: Raw Cotton exports (Value in Million US$)

Country 2002-03 2003-04 2004-

05

2005-

06

2006-07 Change in Last 5

Years

Share in Total Raw

Cotton Exports

Indonesia 12.55 12.39 25.76 19.17 19.36 54% 38%

Bangladesh 20.36 14.91 20.64 27.87 18.37 -10% 36%

Thailand 2.87 8.06 24.24 4.23 5.34 86% 11%

Other Asian

Countries

1.87 4.04 11.80 3.10 3.64 95% 7%

Viet Nam 0.39 0.75 7.92 1.46 2.67 582% 5%

Pakistan meets 84% of its import requirement from Asia, North America and Africa while South America

is also edging in as a supplier of raw cotton.

Table 11: Raw Cotton Imports (US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Asia 50.78 155.31 67.97 73.15 288.77 469% 44%

North America 92.68 164.69 234.98 81.84 163.91 77% 25%

Africa 36.44 91.10 117.21 90.79 99.03 172% 15%

South America 0.43 3.68 44.26 90.63 61.19 13984% 9%

Europe 36.41 69.18 37.96 26.92 29.96 -18% 5%

Oceania 10.12 23.81 13.41 9.60 11.04 9% 2%

The bulk of imports are in long and extra long staple cotton with India and the United States being the

major sources.

Table 12: Top 5 Import Sources for Cotton (US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

India 0.04 53.66 14.93 39.56 236.58 561635% 36.18%

United

States

92.46 164.52 233.06 80.57 163.33 77% 24.98%

Brazil 0.42 3.38 43.48 90.55 61.19 14559% 9.36%

Egypt(U.A.R.) 13.70 14.13 45.85 39.90 26.62 94% 4.07%

Mali 1.23 13.95 25.84 2.76 25.02 1940% 3.83%

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Category-wise Performance 14

After India and United States, Brazil has also become an important source as their cotton is

contamination free and in-addition give higher yield and better quality of yarn, although their cotton

length and physical properties are similar to Pakistani cotton.

Table 13: Top Imported Varieties of Cotton (Cotton US$ Million)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

52010090 OTHER COTTON 132.80 343.24 244.06 247.97 454.10 242%

52010010 COTTON, AMERICAN 84.32 154.45 233.84 87.24 174.27 107%

52010020 COTTON, EGYPTIAN 9.76 10.07 37.89 37.72 25.53 162%

Egyptian cotton is widely used in medium counts for the production of shirting fabrics and carries the

highest cost per unit of US$ 2.3 per Kg compared with US$ 1.13 per Kg unit price of Pakistani cotton.

5.2 Cotton Carded or Combed4

5.2.1 Exports

Pakistan is exporting semi process cotton which is used mostly for the open end industry of our

competitors along with the medical use. This is a small category and our exports have only reached a

maximum of US$ 15.9 million per year uptill now.

Table 14: Export Performance of Cotton (Carded or Combed) from Pakistan5

2002-03 2003-04 2004-05 2005-06 2006-07

Quantity (Million KG) 0.49 2.71 6.19 61.07 18.24

Value (Million US$) 0.37 2.69 5.69 10.32 15.93

Average Unit Price (US$/KG) 0.76 0.99 0.92 0.17 0.87

4 This category includes only one tariff line i.e. 52030000.

5 Trade share of this category in Pakistani Export mix has increased from 0.01% to 0.15% during 2002-03 and 2006-

07 while it has negligible share in import mix.

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Category-wise Performance 15

Export destination is limited to the few countries of Asian and European region which are also shown in

the following table.

Table 15: Top partners in Cotton (Carded or Combed) exports from Pakistan (Value in Million US$)

Country 2002-03 2003-04 2004-05 2005-06 2006-07 Change

in Last 5

Years

Share in

2006-07

Other Asian Countries

0.01

0.43 0.83 2.82 3.40 23,812% 21%

Italy

0.16

0.89 1.62 1.46 3.30 1,945% 21%

China - 0.63 0.21 1.48 2.49 0% 16%

Belgium - 0.11 0.63 0.72 1.73 0% 11%

France - 0.12 0.55 0.48 1.37 0% 9%

5.2.2 Imports

We have almost no imports of carded/combed cotton.

5.3 Yarn6

When Pakistan came in to being there were only two textiles and clothing mills, since then Pakistan is

now the third largest exporter of cotton yarn.

In 1970 there were 2.8 million spindles in Pakistan, in 1980 this figure increased to 4 million, in 1990 to

5.6 million, in 2000 increased to 8.8 million, in 2005 to 10 million and in 2007 the number of spindles

were 11.2 million along with the 250,000 rotor spindles.

Progress of the spinning industry was mainly dependant on the Government policies which favored

investment in the sector. From 1999 to 2006, 4 billion USD were invested by the textiles and clothing

sector out of which 50% were invested in the spinning sector.

5.3.1 Exports

The category of cotton yarn ranked 5th in our export mix in 2002-03 with a share of 12.27% and now has

13.24% share and has over passed the exports of readymade garments which is now at 12.84%.

This category had a compound growth of 12.17% in last 4 years by volume and has fetched better

average price per unit for the country as well.

6 This category comprises of ‘46’ 8-digit HS codes which fall under Chapter 52.

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Category-wise Performance 16

Table 16: Export Performance of Cotton Yarn from Pakistan

2002-03 2003-04 2004-05 2005-06 2006-07

Quantity (Million KG) 519.33 499.07 504.72 671.70 665.52

Value (Million US$) 905.23 1,080.85 1,045.82 1,379.91 1,443.13

Average Unit Price (US$/KG) 1.74 2.17 2.07 2.05 2.17

5.3.1.1 Product Mix

As Pakistani cotton is of short staple, the spinning industry is mainly producing coarser yarn. According

to the International Textiles and clothing Manufacturing Federation (ITMF) statistics 2005, Pakistan had

9.5 million short staple spindles and 3.5 hundred thousand long staple spindles7. Resultantly most of the

yarn which spinning industry is exporting is of coarser count.

Table 17: Top sub-categories of Cotton Yarn exports from Pakistan to World (Value in Million US$)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07

52051200 S-COT.YARN UCF.D-232.56-714.29 415.39 540.96 517.49 515.27 427.84

52053200 MUL/CAB C/Y ULF.232.56-714.29D 71.49 78.28 66.74 334.57 370.70

52051100 SIN.COT.YAR.U.COM.FIB.D-714.29 51.02 66.77 98.88 153.32 161.84

52052200 S/C YARN LF.DX.232.56-714.29 214.86 223.36 193.56 161.08 160.28

52053100 MUL/CAB.C/Y.ULF.>714.29DECITEX 2.30 5.69 7.57 53.11 93.28

52051300 S-COT.YARN UCF.D-192.31-232.56 31.93 40.22 41.20 26.37 46.87

52052300 S/C.YARN LF.DX.192.31-232.56 32.09 31.79 30.61 25.68 37.66

52052400 S/C YARN COM.FIB.125-192.31-DX 11.68 15.81 23.50 24.48 25.12

52054200 MUL/CAB.C/Y CF.232.56-714.29DX 12.75 8.03 5.94 5.02 24.44

52052100 S/C YARN COM.FIB D-714.29/MORE 17.00 21.63 32.39 34.07 20.19

Average unit price depends on the quality of the yarn, Uster Statistics results, and the value addition in

the yarn i.e. finer counts, singed yarn, compact yarn and dyed yarn etc,. The coarser counts have lesser

value and hence our overall average export price per unit of cotton yarn has hovered around US$ 1.74-

2.17 per Kg.

7 In short spindle capacity, Pakistan is ranked third behind China and India. In long staple capacity Pakistan was

ranked 11th

along with the Malaysia. In open end spinning capacity Pakistan is ranked fourth after China, India and

Uzbekistan.

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Category-wise Performance 17

Another major factor which affects the average unit is the price of international cotton. In 2005-06 when

the world observed bumper crop, average unit price had a decline which is also shown in the following

table for top export varieties.

Table 18: Top export Products (AUP Cotton Yarn US$/KG)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

52051200 S-COT.YARN UCF.D-232.56-714.29 1.63 2.07 2.01 1.96 2.03 24%

52053200 MUL/CAB C/Y ULF.232.56-714.29D 1.84 2.26 2.18 2.07 2.22 20%

52051100 SIN.COT.YAR.U.COM.FIB.D-714.29 1.52 2.02 1.89 1.87 1.96 29%

52052200 S/C YARN LF.DX.232.56-714.29 1.89 2.33 2.16 2.26 2.30 22%

52053100 MUL/CAB.C/Y.ULF.>714.29DECITEX 1.90 1.99 2.24 2.24 2.31 21%

5.3.1.2 Export Destination

Asia has always remained the major export destination of our yarn and constitutes almost 73% of our

cotton yarn exports; however the share has declined from 78% in last 4 years.

Table 19: Regional Diversification of Exports (Cotton Yarn US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Asia 704.50 796.50 777.75 1022.48 1063.78 51% 73.7%

Europe 100.72 134.00 115.75 165.93 210.75 109% 14.6%

North America 80.63 124.32 121.79 154.45 109.75 36% 7.6%

Africa 13.90 19.04 21.88 22.12 30.16 117% 2.1%

South America 3.04 4.91 7.30 12.89 27.03 791% 1.9%

Oceania 1.88 1.69 1.05 1.18 1.36 -28% 0.1%

On the contrary our exports are increasing with higher growth rates in East European, South American

and African markets. The reason behind is that the spinning industry from developed countries has

started shifting towards the low cost countries in their neighborhood countries and as these countries

require in-put mainly yarn and fabric to produce apparels, that is why Pakistani yarn has high demand

and export of cotton yarn is increasing.

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Category-wise Performance 18

Table 20: Top partners in Cotton Yarn exports from Pakistan (Value in Million US$)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Change in Last 5

Years

Share in Total

Cotton Yarn

Exports

Hong Kong 284.16 338.90 324.64 420.56 403.77 42% 28%

China 104.96 142.61 148.27 264.12 332.80 217% 23%

Korea, Republic of 128.07 118.66 83.19 109.52 89.96 -30% 6%

United States 63.33 106.86 105.31 127.28 82.08 30% 6%

Portugal 25.22 39.97 36.66 56.75 74.06 194% 5%

Bangladesh 20.71 53.24 58.95 74.15 68.10 229% 5%

Turkey 27.26 45.12 35.25 41.99 50.50 85% 3%

Italy 19.12 19.42 21.59 37.93 49.79 160% 3%

Japan 51.30 52.07 57.50 49.89 49.66 -3% 3%

Other Asian

Countries

37.14 20.01 27.04 21.85 27.55 -26% 2%

Hong Kong and China are our major export destination and the fact behind is that during the last decade

China has doubled its textiles and clothing exports requiring large quantities of yarn to meet its value

added sector requirements. Bangladesh, Portugal and Italy are also growing as export destination for

Pakistani cotton yarn.

There is a threat however as China is establishing its spinning base to meet the demand of its local

industry. In 2005 China installed 7.2 million spindles, while in 2006 more investment was done for

procurement of 6.9 more spindles.

Bangladesh has a disadvantage as it has to import cotton to produce yarn, even then its spinning

industry is flourishing as total yarn produced is consumed locally and also Government is giving 5%

subsidy for consuming locally produced yarn.

Bangladesh has also installed approximately 0.5 million spindles along with 6000 rotors in year 2005.

Turkey has installed 0.31 spindles in 2005 and 0.19 spindles in 2006. India has installed 1.43 million

spindles in 2005 and approximately doubled the figure in 2006 which is 2.8 million spindles.

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Textiles and Clothing Trade 2002-07

Category-wise Performance 19

5.3.2 Imports

Pakistan has sufficient production of cotton yarn; however as Pakistan has less number of long staple

capacities, there is seasonal demand for the finer counts, which is met by imports8.

Table 21: Total Cotton Yarn Imports

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million KG) 0.44 4.34 2.56 3.60 1.58 261%

Value (Million US$) 0.84 11.40 7.71 13.85 5.09 506%

Average Unit Import Cost(US$/KG) 1.91 2.63 3.01 3.85 3.21 68%

The higher average unit import cost as compared to our exports is showing that we are importing yarns

of higher quality and higher counts. This fact is also illustrated in the following table.

Table 22: Top Import Commodities (Cotton Yarn US$ Million)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Share in Last

Year

52061100 S/C YARN UN COM.

FIB>714.29 DX

0.00 0.00 0.15 0.79 1.59 31%

52052700 S/C YARN COM.FIB.106-36-

125-DX

0.00 3.18 3.12 8.50 1.23 24%

52054800 MUL/CAB.C/Y COM.FIB.<

83.33.DX

0.06 0.15 0.12 1.85 0.58 11%

52063100 MUL/CAB C/Y UNF >14.29 DX 0.03 0.35 0.77 0.23 0.52 10%

52053200 MUL/CAB C/Y ULF.232.56-

714.29D

0.00 0.03 0.05 1.34 0.46 9%

As far as sources of imports are concerned, 94% of our cotton yarn is imported from Asian countries

while India is the only major partner.

Table 23: Top 5 Import sources for Yarn (US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

India 0.84 8.09 5.16 10.31 3.90 364% 77%

Indonesia 0.00 0.21 0.77 1.07 0.57 11%

Bahrain 0.00 0.00 0.01 0.00 0.18 4%

Spain 0.00 0.11 0.02 0.00 0.12 2%

Italy 0.00 0.00 0.10 0.00 0.08 1%

8 Cotton yarn imports had a share of 0.14% in our textiles and clothing import mix in 2002-03 and have increased

to 0.31% in 2006-07.

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Category-wise Performance 20

5.4 Yarn Other than Cotton9

Pakistan spinning industry is mostly producing cotton yarn and has limited base for the production of

other varieties of yarns and hence Pakistan is a net importer of MMF yarns and filaments, silk yarn, wool

yarn and other vegetable yarns.

Table 24: Trade of Yarn other than Cotton10

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Export Quantity (Million KG) 28.25 17.23 15.39 17.27 30.78 8.96%

Import Quantity (Million KG) 61.28 71.42 74.27 135.84 123.51 101.55%

Net Trade Flow (Million KG) -33.03 -54.19 -58.88 -118.57 -92.73 180.74%

Export Value (Million US$) 46.88 33.72 30.58 36.92 67.9 44.84%

Import Value (Million US$) 93.73 118.27 138.22 250.62 270.45 188.54%

Net Trade Flow (Million US$) -46.85 -84.55 -107.64 -213.7 -202.55 332.34%

The MMF sector is underdeveloped in Pakistan and one of the reasons behind it is that as our local PSF

and PFY plants couldn’t compete with the international prices. To support the underdeveloped sector,

fiscal protection was given to the MMF sector, and hence prices of MMF became high as compared to

international market and hence subsequent sectors are not developed to produce value-added apparels.

5.4.1 Product Mix

Internationally the use of MMF has surpassed the cotton consumption for the production of textiles and

clothing products. After the post quota regime, our apparel sector has also started manufacturing MMF

apparels and hence Pakistani weaving and knitting industry has started importing MMF yarn for sub

sequent processing for further value addition. This category although includes silk and wool yarn

however the varieties of MMF top the chart for our top 5 import commodities for this sub-section.

9 This category comprises of ‘77’ 8-digit HS codes which fall under Chapter 50, 51, 53, 54 and 55

10 The trade share of yarn other than cotton has declined from 0.64% to 0.62% in our export mix in last 5 years

however has increased from 15.8% to 16.6% in the import mix during the same time period.

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Textiles and Clothing Trade 2002-07

Category-wise Performance 21

Table 25: Top Import Commodities (Yarn other than Cotton US$ Million)

HS CODE 2002-

03

2003-

04

2004-

05

2005-

06

2006-

07

Growth Share

54023300 FILAMENTS YARN OF

POLYESTERS

17.50 28.13 34.12 72.25 70.93 305% 26%

54024300 OTH S-YARN,POLYE 50

TURNS/MTR

21.49 25.80 30.13 63.17 49.98 133% 18%

54033100 OTH Y/S UN-TWST

VISCOSE RAYON

10.45 12.40 13.53 27.82 32.00 206% 12%

54024910 ELASTOMERIC

YARN,COMP POLYURET

9.86 19.43 22.39 18.96 29.47 199% 11%

54024100 OTH YARN, SINGLE,

UNTWISTED<50/M

4.58 2.78 3.17 9.12 9.55 108% 4%

Although MMF yarn and filaments are cheaper than cotton yarn, there is an Increase in average unit

cost due to surging prices of oil as it is one of the by-products.

Table 26: Top Import Commodities (AUP Yarn other than Cotton US$/KG)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

54023300 FILAMENTS YARN OF POLYESTERS 1.10 1.13 1.34 1.48 1.64 49%

54024300 OTH S-YARN,POLYE 50 TURNS/MTR 1.13 1.17 1.31 1.40 1.57 39%

54033100 OTH Y/S UN-TWST VISCOSE RAYON 2.15 2.11 2.20 2.40 2.81 31%

54024910 ELASTOMERICYARN,COMP

POLYURET

8.09 8.34 7.66 7.66 7.70 -5%

54024100 OTHYARN,SINGLE,UNTWISTED<50/M 1.47 1.96 2.02 2.08 2.20 49%

5.4.2 Trade Partners

Initially Europe was the central place for MMF manufacturing but now China and Taiwan has taken the

top slot. Pakistan is sourcing most of its imports for this category from Asia i.e. more than 91% while

China is our leading import source.

Table 27: Top 5 Import sources (Yarn Other than Cotton US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

China 11.31 16.22 30.13 74.81 114.23 910% 42%

East Timor 13.34 22.99 27.38 41.59 27.26 104% 10%

Falkland Is. Malvinas 8.16 9.72 12.48 26.08 25.58 214% 9%

Georgia 9.68 12.08 11.39 15.01 19.24 99% 7%

Guatemala 17.83 11.64 12.67 23.37 14.39 -19% 5%

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Textiles and Clothing Trade 2002-07

Category-wise Performance 22

As far as exports are concerned, 42% of it was directed towards Asian countries in 2006-07 however

Portugal is our major export destination for last five years maintaining more than 20% share in our

exports.

Table 28: Regional diversification of Exports (Yarns other than Cotton US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Asia 19.78 13.03 8.72 11.85 28.51 44% 42.1%

Europe 18.57 13.45 14.18 14.94 24.27 31% 35.8%

South America 2.15 1.38 2.72 4.40 7.62 255% 11.3%

North America 5.60 4.92 3.87 4.62 5.03 -10% 7.4%

Africa 0.63 0.84 0.94 0.82 2.25 256% 3.3%

Oceania 0.14 0.04 0.03 0.10 0.03 -77% 0.0%

We were only exporting polyester yarns till 2005-06 however in the last year other varieties majorly

acrylic yarn was exported as well.

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Share in last Year

54023300 FILAMENTS YARN OF

POLYESTERS

32.56 24.83 10.88 15.93 25.06 39.35%

55095300 OTH YRN OF POLYESTER

MIX COTTN

10.88 2.82 7.43 13.24 19.7 30.94%

5.5 Cotton Cloth11

Along with the development of the spinning industry in Pakistan, weaving industry had a mushroom

growth and small units equipped with hand looms were installed which were later on converted to

power looms. Now Pakistan have about 35,000 shuttle less looms, and 3,00,000 power looms

approximately producing 8 billion sq meter of fabric.

Shuttle less loom sector is in organized sector, but the power loom sector is having average unit size of

20 looms. Power loom sector has a limitation of producing coarser quality fabric of short width, high

wastages and non-economies of scale are the other limitations.

5.5.1 Exports

Most of this fabric is used locally for the manufacturing of value added products however 30% of it is

exported to other countries. The commodity has remained 2nd top category in our textiles and clothing

exports during last 5 years with a share of 17.7% and 18.8% in 2002-03 and 2006-07 respectively.

11

This category comprises of ‘86’ 8-digit HS codes most of which fall under Chapter 52 while few under Chapter 58

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Category-wise Performance 23

Table 29: Export Performance of Cotton Cloth from Pakistan

200

2-03

200

3-04

200

4-05

200

5-06

200

6-07

Quantity (Million SQM) 2,03

6.32

2,40

9.41

2,39

7.65

2,63

3.98

2,21

1.73

Value (Million US$) 1,31

1.09

1,64

2.37

1,84

2.98

2,10

3.26

2,04

7.72

Average Unit Price (US$/SQM) 0.64 0.68 0.77 0.80 0.93

The average unit prices had a steady growth over the last five years however cotton cloth exports have

gone down in post-quota era. Pakistani exports were hit hard in US, UK and Hong Kong with fierce

competition and also many processing plants along with the apparel sector from North America has

been closed or relocated to Asian countries, which has ultimately affected the export of fabric from

Pakistan to North America.

Table 30: Regional Diversification of Exports (Cotton Cloth US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Europe 364.06 568.69 640.86 767.73 841.66 131% 41.4%

Asia 416.02 469.94 567.46 659.07 661.27 59% 32.5%

North America 344.80 387.93 372.98 376.72 265.92 -23% 13.1%

Africa 108.26 127.99 153.57 169.71 157.18 45% 7.7%

South America 33.64 46.70 65.32 87.13 88.12 162% 4.3%

Oceania 31.94 29.05 24.62 23.77 19.89 -38% 1.0%

Europe by far is the largest importer of our fabric and is processing it to convert it manufacture high

value added products. Eastern Europe is also establishing its apparel Industry with the foundation of

shorter lead times and hence is attractive export destination for Pakistani cotton cloth.

In Asian markets, many countries do not have the complete back ward integration and they have started

their career as apparel manufacturers, and thus are importing fabric from Pakistan.

Turkey has over passed US as our top export destination for our cotton cloth exports. Italy, Bangladesh

and Srilanka are also growing market for Pakistani cotton cloth.

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Category-wise Performance 24

Table 31: Top partners in Cotton Cloth exports from Pakistan (Value in Million US$)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Change in

Last 5

Years

Share in

Total

Cotton

Fabric

Exports

Turkey 58.91 112.78 141.93 172.09 218.77 271.38% 11%

United States 283.69 319.86 288.95 305.15 194.77 -31.34% 10%

Italy 53.51 79.77 92.99 119.26 133.02 148.60% 6%

Bangladesh 30.82 65.31 70.35 113.22 120.43 290.78% 6%

Sri Lanka 24.44 40.32 54.18 87.34 107.78 341.00% 5%

Hong Kong 115.71 104.52 108.66 124.36 98.31 -15.04% 5%

Spain 30.91 59.34 65.40 75.22 78.79 154.92% 4%

Germany 33.05 51.74 49.94 66.85 71.73 117.03% 4%

Belgium 33.46 37.93 49.96 50.65 61.65 84.27% 3%

United Kingdom 55.93 79.48 65.87 73.37 57.85 3.44% 3%

5.5.2 Export Mix

Woven griege fabric is the top exporting commodity which shows that Pakistan has the raw material but

is not converted to the processed fabric and then further not utilized for the apparel or made up

industry.

Table 32: Top sub-categories of Cotton Cloth exports from Pakistan to World (Value in Million US$)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07

52081900 OTHER WOVEN COTTON FAB UN-BLH 414.89 499.67 353.26 489.83 321.93

52103100 COT WOV FAB MX-MMF200G/Million SQM DYE 15.88 47.61 152.82 216.97 214.78

52105100 W-FAB COT MIX,MF W200G/Million SQM PRI 188.41 262.10 283.45 319.48 174.21

52121300 OTH COT W-FAB DYED W 200G/Million SQM 189.49 181.84 223.07 272.15 161.86

52085900 OTH COT WOV FAB 200G/Million SQM PRINT 104.18 88.63 69.38 101.38 114.75

52102100 W-FAB COT MIX-MMF WT 200G/Million SQM 28.39 109.73 127.86 118.07 102.72

52094200 COTTON WOV FAB DENIM>200G/Million SQM 18.79 41.68 64.59 72.93 93.22

52091100 WOV FAB COT WT>200G/Million SQM UNBLAC 0.17 0.61 7.36 36.65 70.16

52083900 OTH COTON WOV FAB<2000/Million SQM DYE 1.53 1.03 41.03 24.91 69.37

52121100 OTH COT W-FAB UN-BL W 200G/Million SQM 2.05 67.45 50.50 38.47 61.26

Export prices have gone up, blended fabric observed more increase compared to the cotton clothes.

Dyed and printed fabric prices experienced 16 and 17% raise in last five years.

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Category-wise Performance 25

Table 33: Top Exported Products (AUP Cotton Cloth US$/SQM)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

52081900 OTHER WOVEN COTTON FAB UN-BLH 0.76 0.80 0.90 0.92 0.98 30%

52103100 COT WOV FAB MX-MMF200G/Million

SQM DYE

0.55 0.63 0.69 0.71 0.82 49%

52105100 W-FAB COT MIX,MF W200G/Million

SQM PRI

0.43 0.47 0.52 0.52 0.60 40%

52121300 OTH COT W-FAB DYED W

200G/Million SQM

1.03 0.98 1.11 1.21 1.21 17%

52085900 OTH COT WOV FAB 200G/Million

SQM PRINT

0.84 0.85 0.94 0.96 0.98 16%

5.5.3 Imports

Pakistan is also importing cotton cloth which has increased almost 3 times in last 5 years however the

share in our import mix has only been 1.49% and 1.55% in 2002-03 and 2006-07 respectively.

Table 34: Total Imports of Cotton Cloth

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million SQM) 8.89 38.33 28.10 15.23 22.67 155%

Value (Million US$) 8.86 35.84 31.12 17.94 25.22 185%

Average Unit Import Cost(US$/SQM) 1.00 0.94 1.11 1.18 1.11 12%

Asia has remained our major import source for the procurement of cotton cloth. The origin for the

cotton cloth has although changed from Bahrain after 2004-05 in the favor of China and Bangladesh.

Table 35: Regional Diversification of Imports (Cotton Cloth US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Asia 7.57 30.62 29.50 15.27 22.32 195% 89%

Europe 0.97 4.56 1.49 2.29 2.33 140% 9%

North America 0.22 0.41 0.00 0.30 0.51 130% 2%

Africa 0.10 0.21 0.07 0.00 0.06 -39% 0%

Oceania 0.00 0.04 0.05 0.08 0.00 -89% 0%

South America 0.00 0.00 0.00 0.00 0.00 #DIV/0! 0%

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Category-wise Performance 26

5.6 Synthetic Textiles and clothing12

Internationally Synthetic textiles and clothing are getting fame over cotton, as synthetic textiles and

clothing products have more product life, better wash and wear properties and brighter colors. Different

blended fabrics can be manufactured by using different fibers and according to the application.

Pakistan textiles and clothing industry is cotton based industry and share of synthetic textiles and

clothing in production is below 25%. The fact is reiterated by the share of this commodity in Pakistani

textiles and clothing trade which has remained below 8% during the last 5 years.

Although Pakistan has a small base of synthetic raw materials however it has remained a net exporter of

this category but the gap has shrunk.

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Export Quantity (Million KG) 787.93 654.61 402.28 289.45 533.81 -32%

Import Quantity (Million KG) 34.9 54.04 57.18 130.23 123.02 252%

Net Trade Flow (Million KG) 753.03 600.57 345.1 159.22 410.79 -45%

Export Value (Million US$) 558.9 451.89 296.87 199.84 424.38 -24%

Import Value (Million US$) 27.11 41.69 39.83 111.06 107.53 297%

Net Trade Flow (Million US$) 531.79 410.2 257.04 88.78 316.85 -40%

The share of synthetic textiles and clothing has declined from 7.6% to 3.9% in export mix and has

increased from 4.6% to 6.6% in import mix which shows that local processing and downstream industry

is catching up with the international trend.

5.6.1 Regional Diversification

Pakistan’s export destinations are well diversified in this category however Europe is the major buyer for

the Pakistani synthetic fabric.

Table 36: Regional Diversification of Exports (Synthetic Textiles and clothing US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Europe 139.28 142.95 84.12 79.56 145.48 4% 34.6%

Asia 225.56 175.35 104.50 54.83 100.53 -55% 23.9%

Africa 89.15 58.57 56.70 34.82 76.36 -14% 18.2%

North America 92.41 60.48 42.03 21.10 55.76 -40% 13.3%

South America 7.33 9.12 6.15 6.94 40.03 446% 9.5%

Oceania 3.68 3.71 2.43 1.26 2.31 -37% 0.5%

12

This category is also called Art, Silk and Synthetic Textiles and clothing however it only includes fabric of man-

made fiber and filament. The category comprises of ‘110’ 8-digit HS codes which fall under Chapter 54, 55 and 58.

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Category-wise Performance 27

Asia is the leading import source in synthetic textiles and clothing imports and Pakistan is sourcing 97%

of its synthetic fabric from Asian countries mainly China which constituted 71% of our total synthetic

fabric imports in 2006-07.

Table 37: Top Import sources (Synthetic Textiles and clothing US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

China 6.92 17.57 22.35 70.97 76.13 1000% 71%

Other Asian Countries 4.93 5.07 3.12 6.88 4.88 -1% 5%

Thailand 1.18 1.70 2.77 3.24 4.87 311% 5%

Korea, Republic of 6.89 5.41 4.06 7.75 4.83 -30% 4%

United Arab Emirates 0.00 0.00 1.41 1.01 3.93 #DIV/0! 4%

5.6.2 Top Traded Commodities

Exports of Synthetic fabric of manmade fiber has increased from 1 million USD to 71 million USD in last

five years, the export of other synthetic textiles and clothing also increased, but the export of filament

fabric has declined in last five years.

Table 38: Top Exported Products (Synthetic Textiles and clothing US$ Million)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

55134100 WOV FAB POLY STAP FIB

PRINTED

1.239817 14.9537 0.496017 12.88087 71.60062 5675%

55131100 W.FAB SYN STA FIB MX COT

170G

0.844767 19.69315 15.41038 13.77588 66.54105 7777%

55134900 O/W-FAB SYN STAP FIB MIX

COTON

0 0.067867 0.464483 0 51.1167 #DIV/0!

54077400 OTH WOV FAB SYNTH FIL

PRINTED

302.9649 186.2202 104.4689 114.5137 34.0117 -89%

55132100 W-FAB SYN STA FIB MX COT

DYED

0.177417 2.891533 4.546 5.977333 27.42932 15360%

Similar to the above trend, filament fabric is the tops imported commodity and its imports have

increased manifolds as well.

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Category-wise Performance 28

Table 39: Top Imported Commodities (Synthetic Textiles and clothing US$ Million)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

54074200 OTH FAB 85% OR MORE

DYED

6.57 13.48 10.74 34.69 29.60 351% 28%

54075200 OTH W.FAB TEXTUR POLY

DYED 85%

1.31 1.85 2.94 6.66 8.42 542% 8%

54076900 OTH FAB POLY FIL TEXTILES

AND CLOTHING MAT

0.72 2.44 3.58 5.16 7.73 979% 7%

54075100 OTH W.FAB TEXTURED POLY

U-BLEA

5.63 4.13 1.97 11.54 7.32 30% 7%

54071000 WOV FAB HI-TENACI YRN

NYLON PO

2.60 3.01 2.88 23.31 6.65 156% 6%

5.7 Knitwear13

Pakistan has a very strong base in Knitwear with heavy presence of Vertically Integrated Units (VIUs).

Pakistan's knitting industry is primarily based on indigenous cotton yarns and is ranked 3rd amongst top

exported categories of Pakistani textiles and clothing. The share of this category in the export mix has

increased from 15.14% to 18.17% volume-wise during last 5 years.

Table 40: Total Exports

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million DOZ) 52.12 66.36 70.99 84.71 97.95 87.9%

Value (Million US$) 1,117.23

1,400.25

1,614.66

1,747.32

1,981.28 77.3%

Average Unit Import Cost (US$/DOZ) 21.436 21.099 22.745 20.628 20.227 -5.6%

This table indicates that AUV has declined over the period and reason behind it can be deteriorated

average unit prices or increased weightage of lower value added products in the export mix.

13

This category comprises of ‘116’ 8-digit HS codes most of which fall under Chapter 61. It includes one tariff line

of Chapter 62 i.e. “62101000 Garments made up of fabrics of heading 56.02, 56.03 (nonwovens)”.

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Category-wise Performance 29

Table 41: Top Exported Products (Knitwear US$ Million)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

61051000 MEN/BOYS SHIRTS COTTON

KNI/CRO

485.7721 540.5504 390.6005 559.2949 533.1642 10%

61091000 T-SHIRT,SINGLETS,VEST COT

K/CR

80.64333 149.5553 140.9457 231.018 262.5949 226%

61152010 SOCKS FULL/KNEE LENGTH 53.63587 83.30447 111.5484 183.1235 206.6893 285%

61059000 MEN/BOYS SHIRTS O/TEXTILES

AND CLOTHING K/CR

4.35475 13.36607 176.5916 50.40502 170.3759 3812%

61061000 W/GIRL SHIR/BLOUSES COT

KN/CRO

88.36173 112.9716 50.0397 69.37485 80.50823 -9%

Cotton based shirts and t-shirts for men, women and boys are the top most export commodities in

Knitwear. However there is also huge growth in the exports of MMF based men and boys shirts and

socks which had a compound growth of 150% and 40% per annum respectively.

Table 42: Top Exported Products (AUP Knitwear US$/DOZ)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

61051000 MEN/BOYS SHIRTS COTTON KNI/CRO 41.19 40.80 42.16 42.96 42.56 3%

61091000 T-SHIRT,SINGLETS,VEST COT K/CR 31.51 32.45 35.40 37.29 39.29 25%

61152010 SOCKS FULL/KNEE LENGTH 4.32 4.73 4.97 4.80 4.87 13%

61059000 MEN/BOYS SHIRTS O/TEXTILES AND

CLOTHING K/CR

40.40 40.91 39.60 40.18 40.96 1%

61061000 W/GIRL SHIR/BLOUSES COT KN/CRO 33.56 34.26 36.59 37.01 38.16 14%

The average unit prices for top 5 commodities by value has not decline however there was a huge

increase in the share of socks in our export mix quantity wise i.e. 23.8% in 2002-03 to 43.3% in 2006-07

which is a low value added product. This increase has resulted in the decline of average unit price of the

whole category.

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Category-wise Performance 30

5.7.1 Export Destinations

North America with 67% share and Europe with 30% share are the major destinations for the Pakistani

exports of Knitwear products.

Table 43: Regional diversification of Exports (Knitwear US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

North America 722.66 845.76 956.58 1131.99 1332.85 84% 67.3%

Europe 325.95 478.50 547.59 544.10 592.97 82% 30.0%

Asia 48.44 49.25 74.30 49.03 34.32 -29% 1.7%

Africa 11.62 17.28 23.78 11.68 11.78 1% 0.6%

Oceania 7.02 6.88 5.97 4.80 4.33 -38% 0.2%

South America 0.45 0.76 2.76 2.28 2.86 535% 0.1%

In last 5 years knitwear exports to North America and Europe has increased with a compound growth

rate of 16.54% and 16.51% respectively whereas there is a decline towards Asian countries. The reason

behind this shift can be the R&D support of 6% which favors the export to EU Countries, United States,

Canada, Australia, Japan, and Switzerland most of which are also our major export destinations for

Knitwear exports.

Table 44: Top Export destinations (Knitwear US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

United States 682.42 808.01 917.86 1084.99 1274.24 87% 64.3%

United Kingdom 98.99 150.45 151.70 160.20 191.37 93% 9.7%

Netherlands 41.63 71.67 72.93 71.06 82.04 97% 4.1%

Italy 26.78 43.71 65.60 80.86 75.83 183% 3.8%

Germany 66.82 84.93 86.74 76.82 65.38 -2% 3.3%

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Category-wise Performance 31

5.7.2 Imports

Import of knitwear garments is insignificant however few retail chain stores have started importing

knitwear garments. The share of this category in import mix of textiles and clothing products has

increased from 0.43% to 1.01% during 5 year time.

Table 45: Total Imports of Knitwear

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million DOZ) 0.08 0.39 0.29 0.76 1.77 2109%

Value (Million US$) 2.58 5.58 4.81 11.60 16.53 542%

Average Unit Import Cost (US$/DOZ) 32.14 14.31 16.82 15.31 9.34 -71%

Almost 90% of these imports are sourced from Asia while China, Thailand and Hong Kong are our major

import sources.

Table 46: Top Import sources (Knitwear US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

China 0.93 2.25 2.14 5.81 9.67 935% 59%

Thailand 0.53 0.90 0.98 2.57 2.22 321% 13%

Hong Kong 0.16 0.31 0.14 0.22 1.47 811% 9%

Italy 0.08 0.16 0.03 0.13 0.41 404% 2%

United States 0.26 0.21 0.20 0.12 0.38 47% 2%

41% of these imports constitutes of babies garments which is a highly value added product and Pakistani

entrepreneurs can exploit the opportunity for investment.

Table 47: Top Imported Commodities (AUP Knitwear US$/DOZ)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

61119000 BABY GARMENT OF OTH TEX KNI/CR 120.31 114.30 141.13 146.34 156.26 30%

61169300 GLOVE,MITTENS ETC KNIT SYN FIB #DIV/0! 1.85 1.37 2.19 2.23 #DIV/0!

61099000 T/SHIRT,OTH TXT KN/CR 18.79 17.80 12.99 20.76 19.98 6%

61069000 W/GIRL SHIR/BLOU OTH TEXMATK/C 18.77 12.38 13.99 17.41 21.33 14%

61161000 GLOV,MITTEN,ETC PCAS/RUBER K/C 2.64 4.58 4.00 7.56 2.70 2%

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Textiles and Clothing Trade 2002-07

Category-wise Performance 32

5.8 Readymade Garments14

Readymade garments are the most value added export category and it has shown a compound growth

of 7.06% per annum value-wise from 2002-03 to 2006-07. There is also an increase in average unit price

which indicates shift towards more value addition. However the share of this category in overall

Pakistani textiles and clothing exports has declined from 14.44% to 12.84% in last five years.

Table 48: Total Exports RMG

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million DOZ) 35.27 26.33 33.24 35.89 39.20 11%

Value (Million US$) 1065.02 953.43 1076.89 1306.88 1399.20 31%

Average Unit Export Earnings(US$/DOZ) 30.19 36.20 32.40 36.42 35.70 18%

5.8.1 Export destinations

The trend in export destination is like-wise Knitwear and Europe and North American markets

accumulated more than 92% of Pakistani readymade garments exports.

Table 49: Regional Diversification of Exports (RMG US$ million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Europe 437.50 454.75 476.39 623.11 733.83 68% 52.6%

North America 365.37 343.18 391.41 540.39 559.25 53% 40.1%

Asia 230.88 132.92 179.76 110.04 77.39 -66% 5.5%

Africa 24.32 15.35 20.61 16.47 13.43 -45% 1.0%

Oceania 4.56 5.67 5.48 8.74 9.11 100% 0.7%

South America 0.58 0.59 0.71 1.82 2.70 366% 0.2%

Effect of R%D support is also evident in the shift towards these markets with a huge decline in Asian and

African markets.

Top Trading Partners for this category is also EU countries and US which have remained our major

export destinations since quota regime.

14

This category comprises of ‘127’ 8-digit HS Codes most of which fall under Chapter 62. However it includes 4

tariff lines of Chapter 61 i.e. 61171000, 61172000, 61178000 and 6117900 (Other made up clothing accessories,

knitted or crocheted; knitted or crocheted parts of garments or of clothing accessories)

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Category-wise Performance 33

Table 50: Top Export destinations (RMG US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

United States 337.01 322.06 372.03 519.62 539.38 60% 38.5%

Germany 117.10 105.66 110.85 148.32 180.71 54% 12.9%

United Kingdom 108.75 110.36 107.18 121.35 143.84 32% 10.3%

Spain 22.09 31.33 43.47 69.57 78.34 255% 5.6%

Italy 30.28 42.28 48.56 67.73 74.40 146% 5.3%

5.8.2 Export Mix

Trousers top the chart in this category. Cotton based men trousers have remained the leading export

product for last five years. However Men/Boys shirts who were 2nd in the list in 2002-03 have dropped

to 5th while cotton based women trouser have taken over its rank with trouser of Man Made Fiber now

ranked 3rd in 2006-07.

Table 51: Top Exported Products (RMG US$ Million)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

62034200 OTH TROU BIB M/BOY COTT

N/KNIT

333.4489 360.5534 337.0137 518.4958 568.0922 70%

62046200 TROUSER W/GRL COTTON

Million DOZT KNIT

87.84732 83.25817 93.69292 205.2938 250.7383 185%

62046900 TROUSER W/GRL TEX MAT

Million DOZT KNIT

0.174083 0.770467 12.93773 52.79775 59.29157 33959%

62079100 BATHROB ETC MEN COTTON

N/KNIT

48.4094 52.77672 39.23935 55.03705 52.77837 9%

62052000 SHIRTS MEN/BOYS OF COT

N/KNIT

89.52125 69.02223 80.878 63.08393 47.06825 -47%

The Average unit prices of these top products have shown a dismal picture in last year which depicts the

increased competition in post quota era.

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Category-wise Performance 34

Table 52: Top Exported Products (AUP RMG US$/DOZ)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

in 5 years

62034200 OTH TROU BIB M/BOY COTT

N/KNIT

41.08 42.83 41.61 42.11 41.22 0%

62046200 TROUSER W/GRL COTTON Million

DOZT KNIT

40.15 40.16 41.35 41.72 42.40 6%

62046900 TROUSER W/GRL TEX MAT Million

DOZT KNIT

38.54 39.34 38.34 39.85 41.33 7%

62079100 BATHROB ETC MEN COTTON

N/KNIT

463.92 467.23 474.41 483.58 475.57 3%

62052000 SHIRTS MEN/BOYS OF COT N/KNIT 38.66 39.21 39.78 41.30 40.63 5%

5.8.3 Imports

Like-wise knitwear, Pakistan has a negligible share of readymade garments in import mix. The share

however has increased from 0.77% to 0.95% in last five years.

Table 53: Total Imports of Readymade Garments

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million DOZ) 0.41 0.63 0.57 0.81 1.25 206%

Value (Million US$) 4.56 4.77 5.45 9.35 15.43 238%

Average Unit Import Cost (US$/DOZ) 11.17 7.55 9.56 11.48 12.35 11%

75% of these imports are sourced from Asian countries while China, UK, and Thailand are our top three

import sources.

Table 54: Top Import sources (RMG US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

China 1.66 1.94 2.75 4.49 8.38 404% 54%

United Kingdom 0.09 0.17 0.09 0.18 1.52 1536% 10%

Thailand 1.33 0.65 0.82 1.55 1.24 -7% 8%

United States 0.12 0.06 0.15 0.18 0.99 737% 6%

Indonesia 0.35 0.18 0.23 0.20 0.40 14% 3%

Baby’s garments and Men suit of other textiles and clothing materials are the top importing commodity

in this category and the reason behind is costlier manufacturing of Made Fiber based woven garments in

Pakistan due to expensive raw material.

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Category-wise Performance 35

Table 55: Top Imported Commodities (RMG US$ Million)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

62099000 BABIE GAR&CLOTH TEX MAT

N/KNIT

2.20 1.24 1.16 2.59 3.04 38% 20%

62031990 SUIT MEN/BOYS TEX MAT

NOT KNIT

0.00 0.03 0.13 0.28 2.34 93692% 15%

62052000 SHIRTS MEN/BOYS OF COT

N/KNIT

0.28 0.31 0.43 1.08 1.17 312% 8%

62121000 BRASSIERES 0.17 0.31 0.25 0.44 0.71 317% 5%

62160010 GLOVES OF TEXTILES AND

CLOTHING FABRICS

0.01 0.63 0.24 0.25 0.52 9186% 3%

5.9 Bed-wear15

Bed ware is one of the strength of Pakistani Textiles and clothing Industry and it has enjoyed 2nd rank in

Pakistani export mix of textiles and clothing during last five years. Lot of investment has been done by

the processing industry in wider width machines to increase its exports as well.

5.9.1 Exports

The category had an impressive compound growth of 16.2% during 2002-03 and 2005-06 however had a

decline of 0.81% in the last year i.e. 2006-07.

Table 56: Total Exports Bed-wear

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million KG) 241.89 244.21 264.44 375.17 366.96 52%

Value (Million US$) 1293.88 1327.77 1434.40 2033.30 2016.77 56%

Average Unit Export Earnings(US$/KG) 5.35 5.44 5.42 5.42 5.50 3%

This decline is basically faced in North American markets where China has put up a strong competition

after quota abolition. Figures in the following table illustrate the same.

Table 57: Regional Diversification of Exports (Bed-wear US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

North America 359.81 435.31 621.59 1092.65 1001.26 178% 50.0%

Europe 546.59 606.40 583.61 718.79 799.28 46% 40.0%

Asia 278.79 199.43 137.52 93.74 83.49 -70% 4.2%

Oceania 48.07 45.29 46.02 54.31 51.80 8% 2.6%

Africa 48.79 28.99 26.72 33.57 40.00 -18% 2.0%

South America 6.17 5.67 8.95 17.71 24.80 302% 1.2%

15

Bed-wear category falls under Chapter 63 and comprises of ‘18’ 8-digit HS Codes.

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Category-wise Performance 36

Despite of facing antidumping duty, Pakistan has been able to maintain its growing trend in European

markets however there is a continued decline in Asia which depicts that we have not remain cost

effective enough to sell our products in underdeveloped and/or developing countries. China again

seems to be the major factor behind this trend.

USA was the major export destination with 47% of the share in 2006-07, however the value has declined

in the last year which corresponds to the earlier explanation.

Table 58: Top Export destinations (Bed-wear US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

United States 328.21 411.38 589.43 1044.38 951.31 190% 47.2%

United Kingdom 183.13 203.33 152.37 159.37 189.86 4% 9.4%

Germany 102.94 90.75 98.73 113.97 120.01 17% 6.0%

Netherlands 56.44 67.85 68.97 87.09 85.26 51% 4.2%

France 75.16 83.27 79.80 87.58 84.86 13% 4.2%

As far as various varieties of bed-wear is concerned, mill-made bed sheets of cotton is the top exported

commodity of this category, however, it has observed a sharp decline in the last year.

Table 59: Top Exported Products (Bed-wear US$ Million)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

63023110 BED SHEETS OF COTTON MILL-

MADE

785.5685 776.918 648.3107 727.2614 514.6846 -34%

63023190 OTH BED LINEN OF COTTON 178.1173 170.4309 140.158 199.6616 274.816 54%

63021010 BED SHEETS, KNITTED/

CROCHETED

23.9829 96.21375 160.0403 153.994 239.0176 897%

63023200 OTH BED LINEN OF MAN-MADE

FIB

63.16065 92.06593 130.0594 358.7473 209.5737 232%

63023990 BED LINEN OTH TEX MAT

Million DOZT/KNIT

106.511 38.99517 50.32903 102.9983 144.19 35%

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Category-wise Performance 37

Rest of varieties has lesser share but they are contributing with almost the same average unit value to

our bed-wear exports and all had increasing trend.

Table 60: Top Exported Products (AUP Bed-wear US$/KG)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

63023110 BED SHEETS OF COTTON MILL-MADE 5.55 5.55 5.57 5.55 5.51 -1%

63023190 OTH BED LINEN OF COTTON 5.26 5.62 5.62 5.64 5.97 13%

63021010 BED SHEETS,KNITTED/CROCHETED 4.47 4.94 5.21 5.27 5.20 16%

63023200 OTH BED LINEN OF MAN-MADE FIB 5.35 5.33 5.46 5.44 5.62 5%

63023990 BED LINEN OTH TEX MAT Million

DOZT/KNIT

4.94 5.06 5.32 5.40 5.46 10%

5.9.2 Imports

Bedware imports are almost negligible and had a minimal share of below 0.07% in our import mix during

the last five years.

Table 61: Total Bed-wear Imports

2002-03 2003-04 2004-05 2005-06 2006-07 Total Growth

Quantity (Million KG) 0.02 0.13 0.12 0.18 0.21 790%

Value (Million US$) 0.12 0.69 0.49 0.92 1.02 762%

Average Unit Import Cost (US$/KG) 5.10 5.48 3.96 5.10 4.94 -3%

5.10 Towels16

Towel is one of the main export commodity, and Pakistani cotton due to its inherent fiber properties

with short staple suits towel manufacturing. There are about ten thousand conventional looms and

about 700 shuttle-less looms dedicated for towel manufacturing. About 80% of the towel manufacturing

is in organized sector.

5.10.1 Exports

Towels had a share of 4.94% in textiles and clothing export mix in 2002-03 and this share has increased

to 5.58% in last five years. Exports of towels have increased with an impressive compound growth rate

of 13.94% while there was a slight increase in average unit price as well.

16

This category only includes mill-made towels which are traded under one 8-digit HS-Code i.e. 63026010

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Category-wise Performance 38

Table 62: Total Exports Towels

2002-03 2003-04 2004-05 2005-06 2006-07 Total Growth

Quantity (Million KG) 100.59 101.81 139.17 158.78 159.47 59%

Value (Million US$) 364.61 387.27 515.00 586.33 608.76 67%

Average Unit Export Earnings(US$/KG) 3.62 3.80 3.70 3.69 3.82 5%

Just like other major value added products, North America and Europe have remained our top export

destinations for Pakistani towels as well and their combined share has risen from about 75% to above

86%.

Table 63: Regional Diversification of Exports (Towels US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

North America 164.37 204.15 272.01 344.06 355.86 116% 59.0%

Europe 108.52 108.67 151.65 163.15 167.97 55% 27.9%

Asia 62.43 45.15 56.20 31.46 38.14 -39% 6.3%

Oceania 12.01 16.14 13.79 20.19 17.54 46% 2.9%

Africa 9.39 6.47 10.83 11.80 15.28 63% 2.5%

South America 3.73 2.34 4.72 5.34 8.33 123% 1.4%

Our exports to Asia has also declined in this category and reason behind is the rising prices of cotton and

cotton yarn in Pakistan and increased competition from China and India.

US, UK and Germany are the major export destinations for Pakistan in this category as well.

Table 64: Top Export destinations (Towels US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

United States 149.37 185.57 252.69 324.82 339.95 128% 55.8%

United Kingdom 21.02 24.74 27.79 34.55 42.63 103% 7.0%

Germany 16.82 14.58 28.81 23.92 22.76 35% 3.7%

Spain 6.63 7.96 16.07 17.31 19.64 196% 3.2%

United Arab Emirates 0.00 0.00 13.99 0.95 16.69 #DIV/0! 2.7%

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Category-wise Performance 39

5.10.2 Imports

Pakistan has negligible imports of towels and we cannot specify any country as a permanent source.

Table 65: Total Imports Towels

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million KG) 0.01 0.03 0.00 0.07 0.05 647%

Value (Million US$) 0.03 0.16 0.00 0.24 0.17 487%

Average Unit Import Cost (US$/KG) 4.00 5.79 2.67 3.36 3.14 -21%

5.11 Tents, canvas and Tarpaulins17

Pakistani cotton is of short staple, and it suits best for the manufacturing of tents, canvas and tarpaulins.

Most of the manufactured products however are consumed locally.

5.11.1 Exports

Share of this category in our textiles and clothing export mix was 0.97% in 2002-03 which had a

continued decline with increasing average unit prices afterwards.

Table 66: Total Exports Tents/Canvas

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million KG) 32.21 31.92 26.44 17.15 25.86 -20%

Value (Million US$) 71.22 71.72 65.85 38.84 69.80 -2%

Average Unit Export Earnings(US$/KG) 2.21 2.25 2.49 2.26 2.70 22%

Steep decline however came in 2005-06 when Pakistan was hit by a huge earthquake on the October 8th,

2005 and Government imposed ban on exports of tents to support the victims.

Tents of cotton top the chart for this category and had a share of 85% in the export mix of this category

in 2002-03. The share and value however has declined to 67%. Rest of products have shown a steady

growth except in 2005-06 but their values are still meager.

Table 67: Top Exported Products (Tents/Canvas US$ Million)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

63062100 TENTS OF COTTON 60.76665 55.40447 52.19083 27.65363 46.64043 -23%

63061110 TARPAULINS, OF COTTON 7.8298 13.4619 6.702833 5.945683 8.475567 8%

63062900 TENTS OF OTH TEX MATERIAL 0.948717 0.926417 1.222033 0.353483 7.074117 646%

63069100 OTH,CAMPING GOODS OF

COTTN NES

0.073383 0.138683 0.24495 0.037083 2.522717 3338%

63061290 OTH AWNING/SUNBLIND OF

SYN FIB

0.047083 0.041883 0.051367 0.32775 1.353133 2774%

17

This category falls under Chapter 63 and comprises of ‘14’ 8-digit HS Codes

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Category-wise Performance 40

Asia is the major export destination for this category constituting more than 73% in last five years and

hot countries of Middles East are our major export destinations.

Table 68: Top Export destinations (Tents/Canvas US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

Saudi Arabia 18.62 35.62 19.03 16.85 28.25 52% 40.5%

Kuwait 14.51 11.53 8.78 4.07 8.79 -39% 12.6%

United Arab Emirates 0.00 0.00 1.92 0.30 3.97 #DIV/0! 5.7%

Libya 0.50 0.30 1.46 0.75 2.87 475% 4.1%

United States 0.85 1.46 0.74 0.93 2.13 151% 3.1%

5.11.2 Imports

Pakistan had negligible imports for this category however as mentioned earlier, the tragic event of

earthquake increased the demand for tents and other camping products for the victims as well as for

the support organization that started their operations in the earthquake hit area.

Table 69: Total Imports (Tents, Canvas and Tarpaulins)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million KG) 0.22 0.02 0.10 2.85 1.70 690%

Value (Million US$) 3.50 0.06 0.34 9.39 6.75 93%

Average Unit Import Cost (US$/KG) 16.27 3.17 3.37 3.29 3.97 -76%

These tents and camping products were mostly sourced from China, US and Canada.

Table 70: Top Import sources (Tents/Canvas US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

United States 0.00 0.00 0.01 0.02 3.70 #DIV/0! 55%

Canada 0.00 0.00 0.00 0.06 1.47 #DIV/0! 22%

China 0.00 0.04 0.06 7.05 0.56 14023% 8%

Korea, Republic of 0.00 0.00 0.00 0.02 0.18 #DIV/0! 3%

Australia 0.00 0.00 0.00 0.00 0.17 #DIV/0! 3%

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Category-wise Performance 41

Most of the imports were made of other textiles and clothing materials.

Table 71: Top Imported Commodities (Tents/Canvas US$ Million)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

63062900 TENTS OF OTH TEX

MATERIAL

0.64 0.00 0.00 3.08 5.68 794% 84%

63069900 OTH CAMPING GOODS

OTH TEX NAT

0.02 0.02 0.01 1.15 0.42 2519% 6%

63061290 OTH AWNING/SUNBLIND

OF SYN FIB

0.00 0.00 0.25 0.04 0.14 22558% 2%

63061190 OTH

AWANINGS/SUNBLINDS

COTTON

0.01 0.00 0.06 1.19 0.13 1653% 2%

63061900 TARPAULINS,AWNINGS

OF TEX MAT

1.04 0.00 0.01 0.31 0.12 -88% 2%

Others 1.80 0.04 0.01 3.62 0.26 -86% 4%

5.12 Other Made-ups18

Other made-up includes all made-ups except bed ware and towels. Share of this category in textiles and

clothing export mix has declined from 4.75% to 4.37% however there was a steady growth in export

value with a compound rate of 7.96% per annum.

Table 72: Total Exports Other Made-ups

2002-03 2003-04 2004-05 2005-06 2006-07 Growth in

5 years

Quantity (Million KG) 19.25 18.06 13.65 16.54 13.06 -32%

Value (Million US$) 68.27 79.21 56.58 73.00 57.84 -15%

Average Unit Export Earning (US$/KG) 3.55 4.39 4.14 4.41 4.43 25%

Quantity (Million DOZ) 74.77 79.25 70.89 79.54 97.14 30%

Value (Million US$) 282.32 320.61 404.04 343.86 418.46 48%

Average Unit Export Earning (US$/DOZ) 3.78 4.05 5.70 4.32 4.31 14%

Total Value (US$ Million) 350.59 399.82 460.62 416.87 476.30 36%

Products in this category have been divided into two major sub-categories on the basis of their unit so

as to evaluate their average unit prices separately. However it is clear from the above table that

products which are quantified in dozens share most of the export mix. Same is the reason behind the

18

This category includes made-ups other than towel and Bedware. The category comprises of ‘35’ 8-digit HS Codes

most of which fall under Chapter 63. Nine(9) of the product lines fall under chapter 56 which include sanitary

towels and tampons; napkins; nappies, diapers and other articles of wadding; and textiles and clothing flock and

dust.

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Category-wise Performance 42

increase in total value in last five years although products in KG sub-category had a continued decline in

last five years.

The decline in 2005-06 in total export value of this category can be associated to other made-ups

articles (ranked 4th in this category) which plunged by 46% of its value in that year.

Table 73: Top Exported Products (Other Made-ups US$ Million)

HSCODE COMMODITY 2002-03 V 2003-04 V 2004-05 V 2005-06 V 2006-07 V Growth

63071020 WASH-CLOTH 71.14642 88.5692 70.17882 93.00808 118.8862 67%

63071040 BAR MOPS 36.05978 49.45562 34.76363 45.0359 65.47425 82%

63039110 CURTAINS OF COTTON

MILL-MADE

54.65798 67.75705 45.72247 61.37252 46.24265 -15%

63079090 OTHER MADE UP ARTICLES 44.9109 39.52442 65.83045 35.87523 37.98838 -15%

63071090 OTHER CLEANING CLOTH 8.404333 10.94438 20.94165 23.48905 35.51307 323%

Wash cloth, bar mops and other cleaning cloth had a positive steady growth and their combined share in

this category has increased upto 46% in 2006-07. Cotton curtains exports from Pakistan have declined

due to increased preference in international market for MMF based curtains. This product line is getting

highest unit value amongst the top exported commodities of this category.

Table 74: Top Exported Products (Other Made-ups AUP US$/DOZ)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

63071020 WASH-CLOTH 2.09 2.42 2.42 2.44 2.71 30%

63071040 BAR MOPS 1.98 2.37 2.55 2.75 2.61 32%

63039110 CURTAINS OF COTTON MILL-MADE 43.53 45.83 50.10 56.78 56.50 30%

63079090 OTHER MADE UP ARTICLES 12.70 16.82 16.67 22.03 22.32 76%

63071090 OTHER CLEANING CLOTH 2.30 2.75 2.58 2.60 2.91 26%

5.12.1 Exports Destination

Likewise other categories US and Europe as export destination constitutes the major chunk of other

made-ups exports. Their combined share has increased from 92% to more than 94% in last five years.

Table 75: Regional Diversification of Exports (Other Made-ups US$ Million)

Exports 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

North America 213.61 237.62 250.66 250.83 297.96 39% 62.8%

Europe 110.58 132.83 171.41 141.47 150.82 36% 31.8%

Asia 17.08 16.66 21.11 10.66 12.42 -27% 2.6%

Oceania 4.96 7.81 7.13 7.84 7.16 44% 1.5%

Africa 3.10 3.56 6.97 4.82 5.19 68% 1.1%

South America 0.38 0.63 1.69 0.50 1.21 219% 0.3%

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Category-wise Performance 43

United States and UK are the major import country of this category while exports other than their share

are fairly distributed amongst various countries.

Table 76: Top Export destinations (Other Made-ups US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

United States 203.61 230.83 238.75 242.34 289.10 42% 60.7%

United Kingdom 59.33 73.03 75.62 65.77 68.38 15% 14.4%

Italy 6.54 11.62 18.89 17.14 17.95 174% 3.8%

Germany 11.92 12.01 18.47 17.03 16.39 37% 3.4%

Belgium 6.41 6.43 7.95 6.94 9.22 44% 1.9%

5.12.2 Imports

There are negligible imports in this category and its share has remained below 0.23% in the textiles and

clothing import mix.

Table 77: Total Imports (Other Made-ups)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million DOZ) 0.04 0.02 0.11 0.28 0.22 453%

Value (Million US$) 0.37 0.35 0.97 2.14 1.41 282%

Average Unit Import Cost (US$/DOZ) 9.09 16.78 8.42 7.74 6.28 -31%

Quantity (Million KG) 0.17 0.22 0.28 0.27 0.33 93%

Value (Million US$) 0.66 0.90 0.90 0.87 1.02 55%

Average Unit Import Cost (US$/KG) 3.83 4.14 3.25 3.17 3.08 -19%

Total Value (US$ Million) 1.03 1.26 1.87 3.01 2.43 137%

Import of made up articles in Pakistan is of small value and is not significant.

China, UK and US are the only countries which have remained source for the imports throughout last

five years.

Table 78: Top Import sources (Other Made-ups US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

China 0.27 0.32 0.76 0.93 1.24 356% 51%

France 0.00 0.00 0.03 0.00 0.18 4093% 7%

United Kingdom 0.05 0.49 0.19 0.42 0.16 200% 7%

United States 0.10 0.13 0.23 0.14 0.16 50% 6%

Canada 0.00 0.00 0.00 0.01 0.13 8758% 5%

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Category-wise Performance 44

5.13 Other Textiles and clothing Materials

This category includes rest of all textiles and clothing items traded under Chapter 50-63 excluding

Chapter 57 (Carpets and other textiles and clothing floor coverings). This category comprises of ‘250’

tariff lines which have no correlation amongst each other.

This category includes waste as well as value added products which did not have a big share in our

export mix.

We cannot make various conclusions out of this category however it is obvious from the following tables

that the trend has changed over last five years and we have become net importer since 2005-06.

Table 79: Total Exports Other Textiles and clothing Materials

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million KG) 312.41 185.80 196.18 160.39 5613.28 1697%

Value (Million US$) 126.00 163.85 203.09 153.36 152.48 21%

Average Unit Export Earning (US$/KG) 0.40 0.88 1.04 0.96 0.03 -93%

Quantity (Million DOZ) 1.73 1.87 1.72 1.40 1.91 10%

Value (Million US$) 56.98 59.13 52.06 50.97 68.29 20%

Average Unit Export Earning (US$/DOZ) 32.89 31.56 30.20 36.34 35.71 9%

Quantity (Million SQM) 20.52 43.60 210.89 47.06 55.22 169%

Value (Million US$) 62.16 58.63 251.72 62.91 78.52 26%

Average Unit Export Earning (US$/SQM) 3.03 1.34 1.19 1.34 1.42 -53%

Total Value (US$ Million) 245.13 281.61 506.87 267.23 299.29 22%

We did not have a steady growth in our exports however the imports have doubled in the last five years.

Table 80: Total Imports (Other Textiles and clothing Materials)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth

Quantity (Million KG) 290.60 335.57 371.12 458.05 474.06 63%

Value (Million US$) 200.11 231.59 299.29 454.70 463.70 132%

Average Unit Import Cost (US$/KG) 0.69 0.69 0.81 0.99 0.98 42%

Quantity (Million DOZ) 0.01 0.03 0.02 0.30 0.19 2213%

Value (Million US$) 0.92 2.11 1.81 30.81 19.27 2003%

Average Unit Import Cost (US$/DOZ) 113.72 74.73 88.90 104.44 103.37 -9%

Quantity (Million SQM) 19.95 20.54 5.58 12.98 14.22 -29%

Value (Million US$) 16.85 16.78 7.40 19.23 23.47 39%

Average Unit Import Cost (US$/SQM) 0.84 0.82 1.33 1.48 1.65 95%

Total Value (US$ Million) 217.88 250.48 308.50 504.75 506.45 132%

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Category-wise Performance 45

5.13.1 Regional Diversification

The exports are well diversified throughout the world and US is the only one which can be identified as

major export destination.

Table 81: Top Export destinations (Other Textiles and clothing US$ Million)

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

United States 62.61 56.98 149.01 68.24 74.76 19% 25.0%

Italy 11.45 12.25 28.88 12.07 14.85 30% 5.0%

United Kingdom 12.66 16.68 28.19 11.78 14.73 16% 4.9%

United Arab Emirates 0.00 0.00 26.73 0.76 14.46 #DIV/0! 4.8%

Hong Kong 3.16 3.99 8.53 10.77 13.13 315% 4.4%

Asian countries can be identified as major import sources as their combined share have always

remained more than 69% through out last five years. China is the major source of imports for these

textiles and clothing products.

Table 82: Top Import sources (Other Textiles and clothing Materials US$ Million)

2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

China 10.87 14.98 18.81 54.74 102.21 840% 20%

Bangladesh 20.11 28.37 37.45 41.68 48.01 139% 9%

Other Asian Countries 33.76 34.87 39.14 50.98 45.56 35% 9%

Korea, Republic of 19.14 22.87 23.30 51.25 35.17 84% 7%

United States 17.89 16.82 22.11 27.03 33.90 90% 7%

5.13.2 Top Traded Products

As far as top exporting products is concerned, they vary from cotton waste to value added products like

blankets. No single export commodity from this category can be identified as major one as no one has

shared more than 0.5% in the export mix in last 5 years.

Table 83: Top Exported Products (Other Textiles and clothing Materials US$ Million)

HSCODE COMMODITY 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

60069000 OTH KNITTED CROACHED

FABRICS

34.20512 42.75265 31.6813 34.51785 23.60893 -31%

60062200 OTH KNIT/CRO FAB COTTON

DYED

1.61775 3.326483 1.065583 9.205683 22.98165 1321%

52029900 OTHER COTTON WASTE 31.20862 31.0917 32.088 30.13432 21.61815 -31%

52021000 YARN WASTE(INCL.THREAD

WASTE)

2.856933 4.68995 7.359333 11.86635 18.66898 553%

63013000 BLANKET/TRAVEL RUGS OF

COTTON

28.71422 23.04477 17.18932 19.45638 17.50772 -39%

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Category-wise Performance 46

The average unit prices of these commodities are as follows which also cannot be compared with each

other.

Table 84: Top Exported Products (Other Textiles and clothing AUP US$/Unit)

HSCODE COMMODITY UNIT 2002-03 2003-04 2004-05 2005-06 2006-07 Growth

60069000 OTH KNITTED CROACHED

FABRICS

SQM 3.20 1.44 1.24 1.28 1.39 -57%

60062200 OTH KNIT/CRO FAB COTTON

DYED

SQM 2.74 1.36 1.23 1.45 1.48 -46%

52029900 OTHER COTTON WASTE KG 0.37 0.37 0.43 0.47 0.58 57%

52021000 YARN WASTE(INCL.THREAD

WASTE)

KG 0.51 0.54 0.42 0.63 0.62 23%

63013000 BLANKET/TRAVEL RUGS OF

COTTON

DOZ 44.62 50.41 55.55 60.84 62.13 39%

The top imported products include viscose rayon, worn clothing and synthetic not carded combed. All of

the top imported commodities have shown a steady growth in last five years.

Table 85: Top Imported Commodities (Other Textiles and clothing Materials US$ Million)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Share

55041000 ART-STA FIB VIS RAYON N-

CRD/CO

45.19 51.40 72.23 101.88 81.26 80% 16%

63090000 WORN CLOTHING&OTH

WORN ARTICLE

36.83 34.91 39.80 47.61 56.12 52% 11%

55032010 SYN FIB NOT

CRD/COM<2.22DECX

0.00 0.00 4.77 54.77 55.15 #DIV/0! 11%

53031090 OTH JUTE&OTH TEXTILES

AND CLOTHING BAST FIB

10.45 19.41 29.28 32.10 36.76 252% 7%

55020090 OTHER, ARTIFICIAL

FILAMENT TOW

9.97 14.10 20.46 23.99 29.19 193% 6%

It is important to note that we are importing more than 120 Million Kgs per annum of worn clothing at a

cheap rate of below US$ 0.36 per Kg.

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Textiles and Clothing Trade 2002-07

47

Table 86: top Imported Commodities (AUP Other Textiles and clothing Materials US$/unit)

HS CODE 2002-03 2003-04 2004-05 2005-06 2006-07 Growth Unit

55041000 ART-STA FIB VIS RAYON N-

CRD/CO

1.28 1.38 1.80 1.71 1.89 48% KG

63090000 WORN CLOTHING&OTH

WORN ARTICLE

0.31 0.31 0.32 0.34 0.36 14% KG

55032010 SYN FIB NOT

CRD/COM<2.22DECX

#DIV/0! #DIV/0! 1.39 1.27 1.35 #DIV/0! KG

53031090 OTH JUTE&OTH TEXTILES

AND CLOTHING BAST FIB

0.26 0.26 0.32 0.43 0.43 63% KG

55020090 OTHER, ARTIFICIAL

FILAMENT TOW

3.54 3.51 3.64 3.82 3.98 12% KG

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Textiles and Clothing Trade 2002-07

Conclusion 48

6 Conclusion

Pakistan’s textiles and clothing industry has remained the mainstay of our export earnings. From the

traditional exporter basic raw materials, yarn and fabrics, to the European and North American markets

the sector gradually graduated to higher value added textiles and clothing. The recent paradigm shift in

the developed countries due mostly to the closure of their textile and clothing industry has moved the

production to developing countries. Pakistani exports of raw material have also therefore, followed this

shift and are now finding markets in developing countries.

The textiles and clothing trade fell victim to the protectionist tendencies in the developed importing

countries which introduced and maintained quantitative restrictions on the developing country exports

for over a half a century.

During this protected quota regime, Pakistan textiles and clothing industry found it easier to export to

American and European markets for the obvious reason that the buyers were equally constrained to

source their requirements from different countries including Pakistan. As one of the largest producer of

cotton, ranking fourth, Pakistan continued to use this comparative advantage to meet the consumer

preference for cotton textiles and clothing in the US and EU markets.

With the elimination of quotas, quality, cost efficiency and lesser turnaround time became more

important and Pakistani exporters found it difficult to compete. The main reason being the lack of

preparation to take advantage of the quota free environment.

The textiles and clothing sector remained entrapped in vicious circle of producing low value added

products. The presence of semi finished categories at the top indicates that Pakistan’s value added

industry failed to increase its production base of invest in technology to make better use of the locally

available raw materials.

Though the overall performance of the textiles and clothing industry was satisfactory yet the target set

by the Government and the expectations of the business men were not met.

The main reasons for not achieving the targets included:

• Low value added products

• Low productivity

• More competitive prices by other countries

• Less concentration by our business men on apparels

• Lack of Availability of raw materials etc

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Textiles and Clothing Trade 2002-07

Recommendations 49

7 Recommendations

It is necessary to upgrade our value added industry so as to take full advantage of our strong upstream

industry and home grown cotton. Government internal as well as external policies should be more tilted

towards value added industry.

To keep pace with the global competition, investments are required in infrastructure and human

resource development particularly in the value added sub-sectors.

Multilateral and bilateral trade agreements should also be designed in a manner to support product and

market diversification with the focus on value addition.

The following recommendations accordingly touch upon specific areas.

7.1 Raw Materials

After 2003, India started the production of certified BT cotton which has increased the yield and India

now has a surplus of four million surplus bales for export per annum. Pakistan should urgently launch an

extensive program to produce BT cotton.

Pakistan should also encourage production of contamination free cotton in the country through

promotion of better practices in farms and marketing, technological upgradation in ginning and strong

enforcement of laws and standards which were developed in 1960’s.

Pakistan needs to take appropriate actions immediately to fill the demand-supply gap by providing free

and easy access to international fiber supply chain.

7.2 Spinning

World demand has shifted towards increased use of MMF which comprises more than 61% of the entire

world fiber consumption by the global textile industry. Whereas the focus of our textile industry has

remained on production of yarn with more than 77% share of cotton.

To leverage our machinery base for economic use and to tap the huge potential that exists for MMF

products, Government has to take supportive measures to balance the value chain for future growth of

Textile Industry in line with the world trends.

7.3 Weaving

Most of the weaving sector is providing low value added fabrics and is not leveraging the cotton base of

the country for higher export earnings.

Technological up-gradation and better infrastructure provision is required for developing a strengthened

foundation of weaving sector for supporting the value added textile products.

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Textiles and Clothing Trade 2002-07

Recommendations 50

7.4 Processing

The processing industry of Pakistan is mainly based on wider width capacity and supports bed-ware and

made-up industry of Pakistan in a proficient manner. It however, lacks capacity for proper support to the

garment industry.

Lack of professional and skilled manpower contributes to loss of expensive chemicals, which increases

the cost of operations. Untreated effluent also poses a big threat of import ban due to non-compliance

of international environmental standards.

To protect the industry from a ban on exports of textile value added products, we need to take all

necessary steps including investment by Government to ensure proper treatment of industrial waste.

7.5 Apparels and Made-ups

This sub-sector, which presently lacks sufficient investment and skilled human resource, holds the key to

the future of our upstream industry. Its development would have positive effects on the quality of yarn

and fabric manufacturing and also on the processing industry.

As lack of skills adversely affect the productivity, continued inaction in skill development would

accentuate the declining share of Pakistan in the global market.

Although we are providing R&D support at the rate of 6% on exports of this sector, it is a temporary

measure. Positive encouragement for productivity enhancement, diversification of production lines and

quality improvements would help this sector to go for high end of the market.

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RESEARCH, DEVELOPMENT & ADVISORY CELL

Ministry of Textile Industry has established a Research, Development and Advisory Cell (RDA CELL) to

devise policy guidelines for the government to facilitate the growth and development of Textiles and

Clothing sector.

RDA CELL has a mandate to study and analyze existing textile policy and align it for the future drive of

the industry. It establishes benchmarks for textile policies of regional and intra-regional textile players of

the world. The Cell analyzes trade performance of different sub-sectors and thereby devise policies to

encourage investment in future growing textile businesses. The Cell further formulate frameworks to

enhance the human resource, technology and infrastructure of the textile industry of Pakistan. RDA CELL

publishes weekly, monthly, quarterly and yearly reports on various issues relating to trade and industry.

RDA CELL OFFICERS

Nasim Qureshi Director General

Phone: +92 51 925917

Fax: +92 51 9257321

Email: [email protected]

Arsalan Ghani Director Technology, Product ivity and

Skil l Development

Contact for issues relating to Machines ,

Technology management, Operations ,

Skil l developments , Trainings , etc .

Phone: +92 51 9235618

Fax: +92 51 9257321

Email : director .technology@rdacell .com

Kanwar M. Usman Director Research

&Development

Contact for Issues relating to

Branding , Marketing ,

International compliance etc .

Phone: +92 51 9235619

Fax: +92 51 9257321

Email : director .rd@rdacell .com

Syed Abbas Mehdi Manager Financial

Analysis

Contact for issues relating trade,

government regulations , f inancials ,

taxat ions , dut ies etc .

Phone: +92 51 9235621

Fax: +92 51 9257321

Contact manager .fa@rdacell .com

Adil Majeed Manager Information

Technology

Contact for Issues relating to

information, e lectronic

resources , Web technologies ,

B2B Portals etc .

Phone: +92 51 9235654

Fax: +92 51 9257321

Email : manager .it@rdacell .com

Website: http://www.rdacell.com

For Further information: [email protected]

For Feedbacks: [email protected]