KARACHI, Jan 17: The local market does not report any fall in prices of the readymade garments, bed wear, towels and a few other textile items in wake of the dwindling exports of textile products , and an almost across the board increase in manufacture of textile goods this year.

The obvious outcome of the rise in textile production and fall in exports should be the building up of inventory of all these textile products. It should have brought some relief to the consumers who throng markets for Eid shopping these days. But to their dismay all textile goods remain expensive and beyond the reach of those who are in Rs7,000 to Rs10,000 income a month. One possible explanation is that availability of bank credits at lower rates even now has enabled the textile dealers to hold on the stocks and wait for the time to grab export orders in weeks to come.

There is an apprehension that if the exports of textile do not pick up to the expected levels to fetch a minimum of $9 to 9.5 billion in entire fiscal of 04-05 quite a many textile companies may default on payment of their bank loans.

Textile sources now report that an almost 16.50 per cent rise in cotton production this season has led to over 8 per cent increase in yarn production and about 16 per cent rise in cloth output. But it shows the alarming trend of downward slide in export of all the textile products except for knitwear.

Bulk of the total cloth weaving estimated at around 7 million square meters will come from the non-mill sector which is expected at about 6.19 million square meters. The organized mill sector is expected to weave about 790 million square meters this year.

A substantial investment of about four billion dollars in last four years has increased the installed spinning capacity to 8.2 million spindles and 694,000 rotors this year.

The spinning capacity in 01-02 was 7.1 million spindles and 641,000 rotors. The cotton consumption capacity of local textile industry is reported to have increased to 2.57 million kg this season as against 2.1 million kg four years ago.

Textile mills are reported to have purchased 47 per cent more cotton this season as against last year as the ginneries report 63 per cent increase in cotton arrivals by first week of this month.

While majority of textile dealers are not that optimistic on export prospects in weeks and months to come Mirza Ikhtiar Baig, the newly elected Chairman of the SITE Association is confident of textiles and overall exports showing a substantial improvement by end-June.

"I am getting good orders from Turkey and other countries for denim," he disclosed while explaining the reason for his confidence and optimism. He said the yarn export has picked up recently in January as indicated by crawling up of yarn prices in the domestic market.

But Baig agreed that it was a transition period for the Pakistani exporters as they are gradually gearing up to market their products in a world market where "there is no quota protection.

It is now virtually a free for all," he said making it clear that any textile dealer who produces best at lowest possible prices and manages to keep a small margin of profit is bound to triumph.

There are many textile dealers who say that a bumper cotton crop in Pakistan and elsewhere in the world has brought textile export trade is under stress. Many of them are now waiting the results of the Heimtextil fair in Frankfurt. The quantum of sale and prices obtained in this fair will convey a lot of trends for the future export.

While the item wise official export-import figures for December are awaited, the five months data shows a substantial rise in export of cotton at relatively low prices and also that of knitwear. All other items that surprisingly include yarn is showing a downward slide.

The export of raw cotton has jumped by about 53 per cent and fetched over 52 per cent more export proceeds that last season. Pakistan exported more than 24 million kg of cotton in first five months to fetch $29 million. Official target for cotton export was $60 million this year which is expected to exceed by a big margin.

Knitwear export is the only item that has kept pace with last year's export and has fetched over $888 million and may even exceed last year's actual export of $1.47 billion. During first five months, the export of cloth has fetched $673 million, which is hardly 38 per cent of $1.7 billion export in 03-04.

Thanks to anti dumping duty imposed last March on bed wear exports to EU, the exports are down to $395 million in July-November 04 as against $1.38 billion last year. Towel exports have fallen to $167 million in first five months as against $412 million last year.

Readymade garments export netted $394 million as against over $1 billion last year. Synthetic fabrics earned only $111 million as against $468 million realized during entire fiscal of 03-04.