KARACHI, Nov 11: Cotton export has grown phenomenally in October along with increase in yarn export. A declining trend has now set in for export of value-added textile products during October virtually across-the-board, signalling a reversal in export trend of textiles.
During the last two years — 2001-02 and 2002-03 — the export of value-added textile products had overtaken export of cotton and yarn. By and large the export structure growth of textiles was set on the path as visualized by the policymakers who designed ‘Textile Vision 2005’.
Textile exporters blame big textile groups and powerful feudals for exporting cotton and yarn and keeping the local industry starved of these basic inputs. Banks have been more than generous in offering finances to the feudals and big textile groups at a much lower rate. Easy bank loan on low rate of return has enabled the big feudals to hold on cotton for a longer period and facilitated big textile groups to buy it and hoard it. “Mind it many leading textile companies earn handsome profits from cotton trade,” a textile exporter said.
Not only that small textile groups are being squeezed out of the business, the whole range of textile product exporters now find themselves hard pressed under the burden of spiralling yarn prices.
This reversal in textile export structure has set in during October when cotton prices rose to Rs3,500 a maund in the local market and more than 80 cents in the international market. Similarly, prices of yarn in the domestic market increased considerably and spinners report yarn export is showing rising trend.
“Yarn export is on rise,” Waqar Monnoo, chairman of All Pakistan Textile Mills Association (Aptma), confirmed to Dawn by telephone on Tuesday. Textile exporters say that yarn export has maintained upward growth during November also and they were hard pressed to deliver the export orders of their products booked a few months before when cotton and yarn prices was affordable for them.
Federation of Pakistan Chambers of Commerce and Industry president Riaz Tata, a manufacturer and exporter of textile products, expect very hard days for himself and his other colleagues involved in exports of value-added textile products.
A cursory glance on the official trade statistics for July- October 2003 and particularly of single month of October reveals that cotton and yarn export is overtaking export of all other textile products.
Official statistics show cotton export increased by 466 per cent in quantity, 510 per cent in rupee terms and 514.5 per cent in dollar terms during October, over cotton export in September. Export of yarn increased in October by 14.26 per cent quantity wise, 13 per cent in rupee terms and 13.71 per cent in dollar terms.
More than 6,000 tons of cotton were shipped during October that fetched $7.32 million. In September, only a little over 1,000 tons of cotton worth $1.2 million were exported. More than 46,000 tons of yarn worth over $88 million were exported during October. In September, 40,000 tons of yarn worth about $77 million were exported.
As against impressive export growth in raw cotton and yarn, the export figures of cotton cloth, knitwear, bedwear, towels, tents and tarpaulin, garments and synthetic textile during October give a dismal picture.
Quantity-wise the export of cotton cloth is down by more than 16 per cent, knitwear by 6.50 per cent, bedwear by 18 per cent, towels by 13 per cent, tents by more than 62 per cent, synthetic textiles by over 32 per cent and garments by about three per cent.
Textile exporters predict downward slide of textile products during November and onward also if the government fails to come out with immediate relief measures.
During the last four months — July-October 2003 — about 9,422 tons of cotton worth $11.21 million were exported.
About 162,000 tons of yarn worth $311 million were exported in the last four months which is less both in quantity and value during the same period of 2002-03.
Overall textile product exports were higher in the last four months of the current fiscal year as compared to the export of these items in the same period last fiscal. But a declining trend has set in during Oct and exporters expect a complete overall reversal in trend by December.