ISLAMABAD: Country’s exports dropped by 13 per cent as total exports dipped to $15.6 billion in the first nine months of the outgoing fiscal year from $17.9 billion a year ago, a drop of $2.3bn.
The trend of continuous fall in exports has partly been compensated by declining global oil and commodity prices that have led to a 4.3pc decline in overall import bill. Steep fall in oil prices is clearly reflected in overall import bill which resulted in $3.3bn savings, from import of petroleum products.
The Economic Survey 2015-16 showed decline in exports across the board where all the major categories of exports registered a negative growth. Falling exports are due to both supply and demand side factors. On the supply side, structural impediments in commodity producing sector, higher cost of production, low level skill and uncompetitiveness also hurt exports.
Investment in exporting sectors remained low, as cut-throat competition with countries, like Vietnam and Bangladesh, is giving tough time to Pakistan’s exporters.
On the demand side, the major factor impeding export growth is slump in economies of major trading partners, like China and EU. Although US import demand remained modest, Pakistan has not been able to supply to US market due to change in market preferences.
An analysis of group-wise exports suggests that food group registered a decline of 11.6pc during July-March of fiscal year 2016 as compared to the same period last year. Within food group, rice export declined by 12.3pc in value, despite favourable 7.6pc growth in quantity.
Textile group, which has 60pc share in total exports, witnessed a decline of 8.2pc during July-March of fiscal year 2016 as compared to the corresponding period of last year.
Exports of intermediate commodity, like cotton yarn, witnessed decline in value and quantity by 32.5pc and 31.9pc, respectively. One reason is that China has continued to reduce its demand for yarn and fabric.
In the textile group, only export earnings of readymade garments and towels grew by 4.2pc, and 0.2pc, respectively, in value and 1.6 and 3.1pc in quantity during July-March fiscal year 2016 compared to same period last year. The grant of GSP-Plus status by EU has a positive impact on these two items, both in value and quantity.
Import of crude oil and petroleum products which generally constitute about 17.2pc of total import bill of Pakistan declined by 37.2pc or $5.583bn in July-March of fiscal year 2016 as compared to $8.896bn of the corresponding period last year.
Crude oil import in quantity increased by 11.6pc whereas its import value decreased by 42.7pc because of decline in the international prices during this period. Between July-March of fiscal year 2016, international crude oil prices declined by 30pc from $55 per barrel to $39 per barrel. Slump in international commodity prices was witnessed all over the world.
Published in Dawn, June 3rd, 2016