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| Textile exporters lag behind Bangladesh, India |
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Saturday, October 24, 2009
By Mansoor Ahmad
LAHORE: The textile industry is facing many constraints which are self-inflicted, like absence of research and development and technological backwardness, as well as state-imposed like power and energy shortages, high interest rates, lack of loan restructuring and market access.
A study by The News reveals though Pakistan is the third largest consumer of cotton in the world, its textile exports are less than those of Bangladesh, which consumes one-third of cotton compared to Pakistan. Similarly, India’s textile exports corresponding to its use of cotton are much higher than Pakistan because of higher value addition.
Pakistan has even failed to keep pace with the expansion of the global textile market which, according to Technopak and Werner Analysis, rose from $482 billion in 2005 to $583 billion in 2008.
Pakistan’s share in global textile exports was a little over 2 per cent in 2005, which declined to 1.8 per cent in 2008. In fact, Pakistan’s textile exports of $10.57 billion in 2008 were less than the textile exports of Bangladesh, which fetched $11.17 billion.
India exported textiles worth $20.23 billion in 2008, which was double the exports from Pakistan, although at the start of the current century the difference between textile exports from Pakistan and India was around $3 billion.
On the government side, no serious efforts were made to increase cotton production, the basic raw material for the textile industry. In the year 1991-92, Pakistan and India were producing same quantity of cotton at around 14 million bales.
However, Pakistan’s cotton output has declined to around 11.5 million bales while the Indians are producing over 26 million bales and their production is on the rise.
Pakistan currently imports around four million bales of cotton a year while India which was a net importer at the start of this century is a leading exporter of cotton.
The textile industry faced another drawback due to high prices of polyester staple fibre compared to global rates. This resulted in low consumption of man-made fiber. Currently, cotton to man-made fibre ratio is 80:20 against global average of 60:40.
The nation is paying the price for the short-sighted approach of entrepreneurs which remained content with the money they were making from low value addition and did not initiate research and development work to introduce high value added products. The sector has also suffered due to lack of policy initiatives from the government.
Currently, over 40 per cent of knitwear units are closed while woven garment manufacturing units have also suffered the same fate. According to the All Pakistan Textile Mills Association, 30 per cent of spinning capacity is not operating, causing widespread job losses.
Industry experts say had the entrepreneurs opted for value addition, they could have survived even the most adverse conditions as higher costs associated with high interest rates and soaring electricity, gas and petroleum rates could have been bearable with more value addition. With present level of value addition in textiles, it seems impossible for the entrepreneurs to bear the high cost of doing business. The government would have to come up with a viable policy to reduce the high cost of doing business.
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ISSN 1563-9479 
