Furniture traders concerned over dwindling exports

LAHORE: Pakistan Furniture Council (PFC) expressed concern over dwindling exports and demanded the government to undertake aggressive tariff reforms, explore more foreign market access and diversify its export base to attain the ambitious export target of $45 billion.

Chairing the PFC board of directors meeting its chief executive Mian Kashif Ashfaq on Saturday urged the government to take radical steps to widen the country’s exports, support local manufacturers and help reduce the growing import bill and give Pakistan handmade world-class furniture products a competitive edge in the local, regional and global markets.

There are a lot of companies in Pakistan that produce standard handmade world-class furniture and other products that the country doesn’t need to encourage or allow indiscriminate importation of unnecessary products, especially that are produced in the country. Therefore, the list of prohibited imports needs to be enlarged to include items local firms produce, he added. The reasons for decline in exports are the sluggish growth in the Pakistan’s major trading partners, UK, US and China, high cost of production due to electricity shortfall and delays in order deliveries and irrational high slabs of taxation, Ashfaq said.

Among Pakistan’s major exports, rice, cotton, leather, jewellery and the chemical sector have been hit hard by the slump in exports.

“Given the current scenario of Pakistan’s diminishing exports, a strategy for bolstering them becomes imperative,” he added.

The country is likely to face mounting pressures on its external side at the end of the ongoing fiscal year where exports are totaling at mere $18 billion even after the passage of 10 months with imports at alarmingly high trajectory of $43 billion.

In this scenario, it can be easily projected that the future increase in oil prices and enhanced China-Pakistan Economic Corridor-related machinery imports would make the import bill to hit $52 billion, while exports would hardly make it to $20 billion, making the country post a massive trade gap of around $32 billion, the PFC CEO added.

Ashfaq said that the situation in the furniture sector too is not presenting good scenario, as the country imports furniture worth Rs4 billion annually, while it exports worth around Rs600 million. The local furniture industries have developed to meet the European standards, so the government and the public need to trust indigenous local products, he said.

“This is how we can ensure the sustainability of our local industries and guarantee employment opportunities for our teeming youths,” he added.

Making it clear that PFC is not totally against putting ban on all kinds of furniture items, Ashfaq said that the government should put a ban on those items, which are not essential and which can be produced in the country easily.

“The imports of goods cannot be prevented entirely because Pakistan is committed to trade agreements that govern the import and export processes.” “The state cannot ban imports completely, but we have different ways to organise imports, which allows the state to increase the Customs tariff on some goods. But to be enforced, this issue requires negotiations with the trade partners,” he added.

The government should also provide more visible support to the furniture business in terms of grants and interest-free loans on easy terms of condition to small-scale woodworkers for exhibiting and travelling to trade shows and promoting Pakistani furniture as a success globally.