European, US buyers Cancelling orders

Published November 7, 2001

KARACHI, Nov 6: The Special Cell in the Export Promotion Bureau has so far received reports of cancellation of 14 million dollars worth of supply orders from 29 exporters. The US buyers cancelled 20 export orders, Europeans 7 orders and one was from South Africa.

Furthermore, eight exporters have informed the Bureau of the instructions they received for putting off the delivery of orders worth about 8 million dollars for indefinite period from their customers. Six were from the US and two from the Europe.

Bulk of these cancelled and deferred orders were for the supply of textile items to the US and the Europe.

“Not all exporters are coming with complaints of cancellation and deferment of their orders,” a senior officer of the Bureau informed this correspondent on Tuesday. He explained that exporters relationship with their customers abroad “is very private” that cannot be shared with others including the government agencies of the countries involved in trade.

The Bureau officials were not sure if all reports of export order cancellation they had received from the local exporters were because of the ‘post September-11 situation’ or ‘entirely other business considerations’.

This Cell has been set up in the Bureau late last month after reports from the exporters that their orders were being cancelled by their buyers in the US and Europe. This Cell is addressing exclusively those problems and issues which relate to the developments after September 11 attacks on World Trade Centre towers in New York and subsequent air raids on Afghanistan by the US since October 7.

A report received on Tuesday from Faisalabad informed the Bureau that the US has levied 1000 dollars testing charges on every container of Pakistan goods that touch any American port. Besides pushing up the cost of Pakistani goods, the Anthrax testing takes almost a month, which disturbs the delivery schedule of both the Pakistani sellers and the American buyers.

The Bureau is trying to approach the foreign customers through Pakistan embassies in the US and European countries to convince them that everything is normal in Pakistan and all export orders can be serviced according to the schedule.

A few minutes video has been prepared for showing on the foreign television channels to convey that factories in Pakistan are operating, ports are functioning and life in cities and villages is perfectly normal.

But ‘Made in Pakistan’ has become a very unpopular brand with the US and Europe, a senior officer observed. His observation is endorsed by a leading textile exporter who said “If the international television channels show the US flag being trampled under the feet of the mob and the effigy of President Bush is being burnt in public meetings in Quetta, Peshawar, and other places, the American consumer is bound to turn repulsive.”

“No amount of government persuasion or cajoling can force American consumer to buy Pakistani products,” the official said while expressing helplessness.

Officials in Bureau confided that their efforts to invite a delegation of American buyers to Pakistan for a short visit have proved futile.

Now, the plan is to sponsor a visit of those textile businessmen who are well known in the US and European markets to convince their partners there of “everything is normal in Pakistan”.

Simultaneously, efforts are on at the official level to seek greater access of Pakistani products to the US market. Exporters are, however, divided on the issue of setting objectives.

“The textile quota barons seek relaxation in quota ceilings,” Abdul Shakoor Khatri, Chairman of the Pak-US Trade and Industry Committee of the Federation of Pakistan Chambers of Commerce and Industry said.

He said the concessions obtained from the EU would serve the interests of the quota barons who sit upon large quantity of textile quotas and virtually earn “rental income” at the cost of small manufacturers who are denied the share.

The Board of Directors of the Pak-US committee of the FPCCI is meeting on Thursday to work out a strategy that would be offered to the government.

Most of the exporters are worried not only on cancellation of orders but also “on reluctance of their buyers to place fresh orders.” Textile exporters predict doom and gloom if they failed to get substantial export orders from the US and Europe in next few weeks.

September onwards is the time when textile industry in Pakistan starts picking up mainly for two factors. Cotton from the fresh crop starts trickling in and textile units start receiving Christmas orders from their buyers in the US, Europe and the Far East.

“It was going very well till September,” Azhar Elahi, a well known global textile operator observed. He said that things start going downwards since September 11 and this fall gained momentum after October 7.

Majority of the exporters and manufacturers want government to take up the issue of lifting all quota curbs on textile exports and abolish tariff barrier. “Pakistani products be treated at par with NAFTA,” demands Shakoor Khatri.

Exporters argue that total textile exports from Pakistan to the US is only 1.8 billion dollars. Total textile imports into the US is about 76 billion dollars. Mexico, the NAFTA partner, supplies tariff free textile imports worth 10 billion dollars in the US. China supplies 9 billion dollars worth of textiles to US.

Pakistan’s textile exports are hardly 2 per cent of US total exports. If this textile exports is doubled to 3.6 to 4 billion dollars, the US market would not be affected much. But it will create immense job opportunities in Pakistan.

“Unemployed young man is the most likely prey to the agitators and demagogues,” a senior business leader remarked who warns “a destabilization in Pakistan will sen tremors far and wide and in all four directions”.

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