Exporters set $6.5bn target for 2006-07: Fabrics, garments
By Our Staff Reporter
KARACHI, Aug 22: After having failed to achieve $5.7 billion export target of fabrics and readymade garments in 2005-06, the exporters are gearing up to fetch anywhere from $6 to $6.5 billion in the current fiscal year.
Final figures for the last fiscal year show that fabrics and readymade garments exports could fetch a little more than $5 billion which is slightly more than $4.7 billion earned from export the previous year.
Textile exporters are pinning hopes on an expected bumper cotton crop, a textile package that offers Rs25 billion in subsidy and rebate to garments, fabrics and the vigorous marketing drive in the USA, EU, African, South American and Far Eastern countries.
Exporters are involved a cut-throat price war in the European Union and USA markets and failed to make as much impact after phasing out of textile export quotas in January 2005 as China, India and Bangladesh did.
“The marketing situation is gradually brightening up for us also,” a leading garment export remarked in a cautious assessment.
He is waiting for the picking assessment of cotton crop and also how the spinners operate this season. He believes that initial euphoria of phasing out of textile export quota is gradually on decline and international textile market is gradually stabilising.
Spinning is the most capital-intensive textile sub-sector and the spinners is the super rich class that for decades thrived on a 50 per price subsidy on cotton and generous bank loaning.
But this season, the government has overlooked spinners while proposing a concession package of Rs25 billion for the knitwear, garment and fabric exporters.The performance of textile sector in 2006-07 will depend by and large on the spinners’ relation with the ginners while buying cotton and then disposal of yarn that can keep the domestic value-added sector starved if some improvement is noted in international yarn prices.
In 2005-06 the textile exporters earned an overall $10 billion against a projected export earning of $10.62 billion showing a drop of about 5 per cent.
A big drop of more than 49pc has been noted in export of raw cotton which is hailed by the spinners, weavers and value-added sector.
“The ideal situation would be total consumption of 15 million bales of cotton by spinners and utilization of yarn by weavers and towel manufacturers,” a leading garment exporter said.
In 2005-06 yarn export fetched $1.46 billion against projected $1.28 billion mainly because of increase in volume as per unit value came down.
Fabrics export was expected to realise $2.49 billion against which $2.19 billion were fetched. This was despite a small increase in the average unit prices of fabrics.
Export of garments dragged behind by 6pc of the target as these could earn hardly $3 billion against $3.25 billion target. This was mainly because of more than 10pc decline in knitwear export which fetched $1.7bn against $1.93bn.
Textile business is pinning all hopes on a bumper cotton crop which should give them anywhere up to 14 million bales, which is enough to keep spinning sector busy till next September when cotton will start trickling in.
There is, however, a lurking fear that if monsoon extended beyond first 10 days of next month, the cotton crop may suffer a setback.
Reports gathered from various sources indicated that cotton crop prospects look bright so far and growers and ginners expect a good picking this autumn.
