The textile buyers in European Union (EU) have adopted a "wait and see" posture, waiting for the new duty structure for the textile exports from Pakistan. Both the textile exporters and the EU buyers have pinned great hopes on the outcome of Prime Minister Shaukat Aziz's talks in Brussels on the market access for Pakistani products, presently marred by the anti-dumping duty on bed linen and the expiry of generalised system of preference (GSP).
A leading exporter Atiq Cochra, in his comments on post-quota situation, said on Tuesday that the European buyers had delayed buying from Pakistan, waiting for the new duty structure, which could be duty-free in the event Pakistan won a place in the EU's new GSP plus scheme.
He anticipated that the situation would turn out to be positive for Pakistan textile exports by March-April when the bogey of Chinese giant image in the textile trade would be exposed.
Already, the export prices of Chinese items had started registering an upward trend and their delivery time has also increased.
Atiq anticipated that the US was likely to announce a new duty structure for the textile imports, which by all means would be in favour of Pakistan.
The record cotton crop in the country and stability in prices of raw material there was no reason to be pessimistic, he added.
Presently, there is 18 percent to 22 percent import duty on various textile products and 28 percent to 32 percent on products made from man-made fiber.
The record cotton crop in the country and stable raw material prices were enough reasons to be optimistic about Pakistan's textile exports, he added.
Former central chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (Plgmea) Tahir Aziz said that Pakistani exporters were losing export orders due to 10 percent increase in the export prices for both the EU and the US markets.
The Pakistani exports have become incompetitive in the EU market due to the expiry of the GSP and due to China's onslaught in the US market.
He warned that if immediate action was not taken to rectify the situation, about 800 garment factories would be closed, rendering 100,000 workers jobless.
He said that the Economic Co-ordination Committee (ECC) had set up a sub-committee to formulate recommendations for a relief package for the garment sector, which had suffered most due to the withdrawal of duty-free access to the EU, and the Prime Minister was believed to have listened to a presentation by the committee before he left for the Brussels visit.
Textile Quota Association (QSC) Chairman and a leading exporter Aziz Memon pointed to a new development in the world textile trade, which might hurt Pakistan and other textile exporting countries.
He said that Indonesia and Sri Lanka had sought concessions in textile exports as a measure of help in the backdrop of devastation caused by the Tsunami.
Exhorting Pakistan exporters to adopt aggressive marketing and bargaining techniques, he admitted that Pakistan's textile exporters would be in hot water if the country did not get a place in the GSP. He did not agree to the suggestion that the country's exports would decline in the post-quota phase and exports to US would balance any decline in external trade to Europe.
The former chairman of Pakistan Cloth Merchants Association (PCMA) said that the textile exporters had been greatly benefited by the abolition of textile quotas, which had made export documentation very simple.
The exporters were no longer required to obtain a visa from the Export Promotion Bureau (EPB) or register their exports at the concerned association.
In the new system, the buyers received shipping documents within two days leading to the prompt payments to the sellers.
He said that the export orders had not followed the world famous Heimtextil fair recently concluded in Frankfurt, Germany, because the buyers were waiting for the outcome of Pakistan's efforts for the duty-free access to Europe.
There is also a slowdown in orders from the US due to the new year holidays.
A leading exporter Ghulam Ismail expressed the hope that as a result of the Prime Minister's talks in Brussels, Pakistan's demand for the withdrawal of anti-dumping duty on bed linen and a duty-free access under the new GSP scheme would be accepted as Pakistan's case was based on facts and justice.
Bilal Mulla, another leading textile exporter, said that the buyers in the EU were demanding 12 percent reduction in the pre-GSP export prices, which had severely hurt the small and medium exporters.
He said that large exporters, who were working on 15 percent to 20 percent profit margin, could afford to reduce the price by 12 percent, but the small and medium export houses would close down.
He said that Pakistan's textile share in the US market was negligible and would not compensate for the loss accrued in the EU market due to 12 percent difference in prices.
Bilal said that all textile exporters were confronted with great dilemma in marketing their products in the new market scenario developed in the post-quota era.