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Importance of textile exports in economy of Pakistan.

It is necessary for our textiles industry to undertake structural changes to censure production of the fabric not produced by our industry, particularly of wider width used in garments industry.

The emergence of strong weaving sector is very essential to enable Pakistan to develop as an exporter of value added fabrics and garments.

Textile industry is the backbone of our economy. It has been playing a significant role in providing employment and raising the standard of living of the people. Its contribution in the overall exports is very large and the share of textile exports excluding cotton in Pakistan's global exports during 1990-91 went 59.27 per cent. Item-wise data on export of Textile are given below:
Item Value in Million
Cotton Yarn 1,171.64
Cotton Fabrics 667.50
Readymade Garments 494.03
Made-Ups (excluding towels) 349.78
Towels 128.88
Hosiery 320.31
Cotton Bags 20.51
Tents and Canvas 76.49
Cotton Waste 55.50
Cotton Thread 3.39
Synthetic Textiles 347.43
Total:- 3,635.46

Growth of Textile Industry

Our textile industry witnessed remarkable growth during the 50's and 60's but it started encountering problems in the 70's. The industry, however, get severe set-back and a large number of spinning units became sick during the 70's. Things started improving gradually and phenomenal changes have taken place during the last few years. In early 70's Pakistan had only 131 textile units which have now increased to 300 in 1991. The number of spindles have increased from 2,848,000 in 1971-72 to 6,330,000 in 1991, showing an increase of more than 122 per cent. The following table shows the number of spindles installed during the last ten years:-
Period Installed Capacity
 Spindles (000)
1980-81 3,983
1981-82 4,180
1982-83 4,265
1983-84 4,224
1984-85 4,396
1985-86 4,422
1986-87 4,292
1987-88 4,330
1988-89 4,853
1989-90 5,271
1990-91 6,330

The weaving capacity is mostly confined to powerloom sector. The development of shuttleless technology is unfortunately very slow and has not made much progress. The total number of shuttleless looms installed are about 5,000 only. the slow progress in this technology is attributing to the high cost of investment in the shuttleless looms.

It is necessary for our textile industry to undertake structural changes to censure production of the fabric not produced by our industry, particularly of wider width used in garments industry. The emergence of strong weaving sector is very essential to enable Pakistan to develop as an exporter of value added fabrics and garments.

Review of Export

Cotton Yarn: Of all the items, cotton yarn has done very well in production as well exports. As will be seen from the following table, its export rose from 207 million dollars in 1980-81 to 1172 million dollars in 1991, showing an increase of about five times. Our share in global exports has increased from 17 per cent in 1985 to 27 per cent in 1989. With the installation of another 70 new spinning units by the March 1992. The production would increase to meet the target of 1400 million dollars in 1991 besides meeting the demands for ancillary industries in the country. The following table shows the export of yarn over the years:
Period Value (Million US $)
1980-81 207.04
1981-82 196.67
1982-83 247.32
1983-84 717.63
1984-85 260.42
1985-86 279.18
1986-87 506.09
1987-88 541.02
1988-89 600.85
1989-90 833.71
1990-91 1,17.64

Major buyers of our cotton yarn are Japan, HongKong and South Korea. Gone are the days when there used to be some complaints about the quality of Pakistani yarn. Our yarn is now graded superior to many countries and are also fetching better prices. In today's competitive world, there is, however, no place for complacency. We have been exporting mainly yarn of coarse and medium counts. The industry should now come forward to produce and export yarn of finer counts from which we can earn more foreign exchange and meet domestic demand for garments and made-ups.

Cotton Fabrics: Cotton fabrics occupies second position on the export list. Export of fabric during 1990-91 amounted to 676 million dollars as against 216 million dollars in 1978-79. Major buyers of cotton cloth are UK, USA, Australia, Japan, Italy, Bangladesh and Federal Republic of Germany.

In 1972-73 the share of unbeached cloth in total export of cloth was 60 per cent which has now fallen to 47 per cent. The textile industry has to come forward to modernise their units so that the quality of fabrics they produce can be improved and our share of finished fabric in total export of cloth is increased further. The following table shows annual growth in exports of cotton fabrics:
Period Value (Million US $)
1980-81 241.38
1981-82 279.54
1982-83 281.37
1983-84 360.77
1984-85 305.92
1985-86 314.84
1986-87 345.46
1987-88 385.40
1988-89 464.75
1989-90 558.96
1990-91 667.50

Readymade Garments: The export of readymade garments has shown steady growth. In the span of ten years export of this item has increased eight fold. During 1980-81, export worth 75 million dollars were made whereas in 1991 the exports amounted to 494 million dollars showing an increased of 559 per cent. The following table shows the annual growth in readymade garments export in the past:-
Period Value (Million US$)
1980-81 75.20
1981-82 94.15
1982-83 122.70
1983-84 162.38
1984-85 132.00
1985-86 206.07
1986-87 355.35
1987-88 349.91
1988-89 335.52
1989-90 393.76
1990-90 494.03

Although some welcome shift towards the value added products has taken place, our readymade garment industry is still characterised by small and medium sized units spread over the main metropolis in the country, most of the products manufactured in these units are casual wears and Pakistan has yet to make headway in the manufacture and export of regular wears. The industry is presently handicapped by non-availability of fabrics of wider range at economical prices. The major buyers of readymade garments are USA, Germany, UK, France and USSR.

Towels: Towels are another item where substantial increase in quality and value has been registered. During 1980-81 we exported towels worth 48 million dollars which has now increased to 128 million dollars in 1990-91. Export of towels are as given below:-
Period Value (Million $)
1980-81 46.94
1981-82 42.88
1982-83 39.13
1983-84 46.51
1984-85 49.71
1985-86 67.51
1986-87 83.93
1987-88 117.93
1988-89 140.44
1989-90 129.82
1990-91 128.88

It would be seen from the above figures that the industry has somewhat stagnated during the last four years. The production and marketing has to be improved to exploit the huge markets that exists in Japan, South Korea, Australia and Newzealand. The major buyers of Towels are USA, UK, Germany, France, Sweden and Japan.

Hosiery/Knitwears: Hosiery or knitwears is another item which has recorded remarkable growth during the last decade. Our exports in 1980-81 amounted to 23 million dollars which has now increased too 320 million dollars in 1990-91 registering an increase of 1300 per cent. The knitwear industry has undergone a radical change and modernised their units to manufacture and export their products to sophisticated markets of USA, Canada and EEC etc. The knitwear industry has been slightly hit in the currently year due too the recession in the USA. The following table shows the growth in exports during the last decade:
Period Value (Million US $)
1980-81 23.19
1981-82 28.54
1982-83 36.54
1983-84 56.01
1984-85 42.63
1985-86 54.63
1986-87 96.60
1987-88 134.34
1988-89 166.94
1989-90 273.72
1990-91 320.31

Major buyers of this item are USA Germany, UK, France, Netherlands and Canada.

Made-ups (excluding towels): Export of made-ups excluding towels amounted to 32 million dollars in 1980-81 which has now increased to 350 million dollars in 1990-91. The items included under this heading are bed-sheets, bed covers, table linen, Napkins and other made-ups. Bed linen alone accounts for more than 50 per cent of our exports. The following table shows the annual exports of these items during the last decade:
Period Value (Million US $)
1980-81 31.68
1981-82 45.53
1982-83 87.04
1983-84 76.17
1984-85 80.16
1985-86 142.33
1986-87 175.00
1987-88 200.93
1988-89 206.73
1989-90 269.03
1990-91 349.78

Major buyers are USA, UK, Germany, France, Netherland and Belgium.

Textile Quotas

Our exports of textiles to the Western industrialised countries are governed by separate agreements signed under the aegis of Multifibre Arrangement (MFA), the following table shows Pakistan's total exports to quota and non-quota countries during the calendar years 1985 to 1990. The above table indicates that there is yet considerable scope for growth in export of textile non-quota items. Export of textiles to quota countries has been 168 million US dollars in 1980 which has increased to 741 million dollars in 1990, showing an increase of about 341 per cent in ten years. Export figure are as shown below:-
 (Value in Million US $)
 1980 1990
USA 57.7 386
EEC 102.8 321
Sweden 6.5 5
Canada 1.1 26
Others - 3
Total: 168.0 741

From the above figures it would be seen that the United States is the biggest market for our textile product closely followed EEC countries. Another aspect which is significant in this connection is the fact that the unit prices of our products exported to quota countries are one of the lowest. Hence there is the needs for better utilisation of quotas and improvement in the quality contents of items subject to restraint. According to our estimates if full utilisation of quota is made and maximum value addition is achieved we may be able to earn about two billion US dollar (almost three times) from our export of textiles goods to quota countries. [Tabular Data Omitted]
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Author:Alam, Akhtar
Publication:Economic Review
Date:Oct 1, 1991
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