Textile manufacture exports witnessed substantial YoY growth of 26.0 percent during first four months (July-October 2005) as compared to a nominal YoY growth of 0.5 percent during the corresponding period of 2004-05, despite the substantial constraints, as well as lower prices.
According to official sources, the major contributors to the textile manufacture exports were bedware, readymade garments, cotton fabrics, cotton yarn and towels. On the other hand, exports of synthetic textiles, other textile made up and knitwear declined.
An important development is the Sino-US textile trade agreement whereby the growth of China's textile exports under selected categories to the US market have been capped during 2006, 2007 and 2008 to 10 percent, 12.5 percent and 16 percent respectively. While the safeguard measures by US on textile exports from China are unfortunate, this provides Pakistani textile exporters some room to revisit their business strategies accordingly.
Statistics shows that the unit values of all the major textile manufactures increased in the pre-MFA period (January-October 2004), thereby increasing major textile exports by 303 million dollars. However, the unit values declined after the complete quota phase-out period (January-October 2005) as a result of intensified price competition to gain share in the international market, consequently having adverse impact worth 119 million dollars on the major textile exports. Interestingly the impact on unit values varies inversely with the degree of value addition.
Despite the impact of anti-dumping duty imposed by the EU and fall in its unit values, the bedware exports were able to record impressive YoY growth of 80.5 percent during the July-October 2005 in contrast to negative growth of 23.0 percent in the corresponding period of the previous year.
This suggests the low base effect as the dominant factor behind this substantial growth. Furthermore, the high growth in the presence of anti dumping duty in EU market indicates that bedware exporters are diversifying their export market outside the EU region.
Similarly, the export of readymade garments depicted 78.8 percent YoY growth during July-October 2005 as compared to the negative growth of 26.2 percent YoY during July-October 2004. However, it is encouraging to note that the unit values of readymade garment exports have also increased during this period.
The increase in unit values is more pronounced in cotton fabric exports. This, together with rise in export quantity enabled the cotton fabrics to record YoY growth of 33.2 percent during July-October 2005 in comparison with the YoY growth of 10.8 percent during the corresponding period last year.
Towel exports recorded 29.1 percent YoY growth during July-October 2005 on the top of YoY growth of 31.2 percent during July-October 2004. The growth performance is remarkable given the high base impact and fall in unit values during the period.
The knitwear exports however recorded YoY decline of 10.2 percent during July-October 2005 as compared to 41.8 percent YoY growth during the corresponding period last year. The decline in export quantum was reinforced by falling unit values.
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