KARACHI, Jan 24: Textile products are gradually catching up with their half-yearly proportionate export targets fetching a total amount of $5.34 billion in July-December 2006 as against a projection of $5.53 billion, the other products -— leather, sports goods, surgical instruments, petroleum products, molasses, fish, fruits and vegetables, chemicals, gems and jewellery appear to be quite off the mark indicating that these will not be able to earn projected $7 billion at end June next.
As the trend appears, the analysts believe that textiles in the current fiscal year may end up showing more than 65 per cent of total exports, while all other products and commodities will generate about 35 per cent of export earnings. This will make Pakistan’s export structure further narrow-based and more vulnerable to pressures of foreign buyers.
A delayed pick-up of textile exports has given all hints of this trend gaining further momentum in remaining period of 2006-07. It has also given the government all reasons to take credit of attributing it to the incentive package of about Rs25--30 billion given to textile sector.
The textile business has been given 6 per cent cash rebate on export of garments, 5 per cent rebate on home textiles and 3 per cent on fabrics, a generous swap of high-interest bearing loans with concession rated loans given to export-oriented units and reduction in export refinance.
“A textile exporter is now getting Rs65 to Rs66 on his one dollar export earning because of all these concessions and incentives,” an analyst estimated. But textile exporters want Rs70 plus for every dollar they earn.
Officials are now of the view that textile does not need any more concession but there is a convincing case of incentives and concessions for other sectors to diversify exports. There is already a lot of heart burning among the exporters of leather, sports goods, surgical instruments, cutlery, engineering goods on textile exporters being pampered and given all concessions at their cost.
An official analysis of the official export statistics, already declared controversial and unreliable by the State Bank of Pakistan in its recent quarterly report, shows that yarn has exceeded its proportionate export target of $724 million in six months and fetched $742 million.
Officials projected a total export earning of $11.5 billion from cotton and textile products in the current fiscal year after having shown actual exports of more than $10 billion in the year 2005-06. Cotton export was projected to earn $70 million, which now is being ruled out because its crop production has remained below than 13.8 million bales. Cotton crop expectations are now around 12 million bales.
Yarn export is expected to earn $1.65 billion against which $741 million have already been realised and exporters are confident of netting in about $1 billion more in the remaining period of the current fiscal year.
Officials fixed an export target of $2.48 billion for fabrics against which $963 million have been earned in first half 2006-07. Garment is projected to realise $3.41 billion against which 1.72 billion has already been netted. Textile made ups are likely to earn $2.77 billion against which actual earnings in July to December 2006 is $1.16 billion.
Rice has shown better performance and has netted $529 million in first half as against $1.27 billion for the whole year. But export of leather products are far behind their target of $1.12 billion as these could earn only $429 million in first half of the current fiscal year.
Sport goods export fetched only $124 million against a target of $350 million, carpets $114 million against $280 million, surgical instruments $55 million as against a target of $180 million, petroleum products $354 million against $840 million, fish $95 million against $210 million, fruits and vegetables $58 million against $150 million, engineering goods $97 million against $235 million, and gems and jewellery only $9 million against $35 million.
The government fixed a total export target of $18.6 billion for the current fiscal year against which actual exports in first half is $8.81 billion that indicates 96 per cent performance. Actual export performance in previous years show that exports exceed the 100 per cent projection of later half period—-January to June—-because of the availability of textile products and a few other items
Imports were originally projected at $30 billion when oil price was high at $68 a barrel. Now that oil prices are down to $51 a barrel, the government still waits for a further drop before hedging it at a level for the remaining period of the year.