12 November 2004	Friday	28 Ramazan 1425

KARACHI, Nov 11: A more than 150 per cent increase in export of raw cotton coupled with rise in yarn shipment during October has given a tremendous setback to the export of value added textile products which has showed a more than 11 per cent fall , almost across the board, in export proceeds during a single month.

Fall in textile exports will also bring down its share in total exports from 67 per cent during last fiscal year to even less than 60 per cent if no corrective measures are taken in time, the market watchers and analysts warn.

Trade analysts and market watchers consider this falling trend in export of textile products the beginning of a process which could become much more pronounced in the days ahead if proper corrective measures were not taken promptly. "October export figures should serve a wake-up call for the Commerce Ministry that has refused to hand over textile export business to the Textile Ministry," a bed sheet exporter remarked.

On pressure of the landed gentry, who dominate the mega size federal cabinet, the public sector Trading Corporation of Pakistan is entering cotton export market with an average loss of six cents for every pound of cotton it has been forced to buy from the ginners. On Thursday, a press release of TCP announced of awarding export bid of 5,000 bales of grade111 cotton to a local company at a rate of 41.55 cents a pound.

Market analysts say cotton procurement is costing TCP 47 to 48 cents a pound if all factors that include officially fixed price, handling charges and financial cost are taken. The TCP has accepted an export bid at an offer of 42 cents a pound giving it a loss of six cents a pound. Total losses to be suffered by the TCP on procurement of half a million bales of cotton and its export will cost exchequer anywhere from Rs10 to Rs12 billion.

Not to be left behind in money making business, the spinners are dumping yarn in the export market to compensate for the import of cotton they were forced to import last year at higher prices and for being denied what they believe low competitive rates of cotton in open market because of a bumper crop which they estimate at over 13 million bales.

Official trade statistics released recently show that textile products export during October fetched $597.96 million in October as against $675.10 million netted in September. Even on a year to year basis, the October export proceeds this year are lower by 3.74 per cent than that of October 03 when it stood at $621 million.

Yarn remains the single textile product that has maintained the growth tempo in export in quantity and value during October which obviously was at the cost of local value added sector. In October, the spinners shipped almost 41,000 tons of yarn to fetch more than $85 million. A month earlier in September, more than 36,000 tons of yarn was exported to earn $83 million. Last year in October, the spinners dumped 40,620 tons of yarn in export market to net $81.59 million. The average export unit price is showing a downward trend during October which will continue if yarn continues to be shipped in higher quantities.

In October, about 7,600 tons of cotton exported, which is almost 175 per cent more than 2,100 tons of cotton shipped in September. Cotton season begins from September and cotton shipment in November and December are bound to be higher. The government has originally fixed a cotton export target of $60 million but it is now expected to fetch more than $120 million in the current fiscal year.

The impact of raw cotton and yarn export has proved to be too telling on textile products shipment which have started showing declining trend. Cotton cloth shipment in October has come down to 155,600 thousand square meters in October from about 182,000 square metres in September. Exporters shipped more than 189,500 metres of cloth in October last year.

Knitwear exports are down by about 20 per cent in quantity and about 21 per cent in value in October. Bedwear and towels have maintained a marginal growth because of previous export orders. But export of readymade garments, synthetic textiles and other products have shown a marked decline.

Overall in four months from July to October 04, the export of textile group stood at $2.78 billion which is about 6.49 per cent higher than $2.61 billion earned during the same period of 03. Total exports at $5.89 billion in July October this year are higher by over 40 per cent in rupee terms and 38 per cent in dollars.