Wednesday, November 17, 2021

Musharraf Era Textile Boom Returning to Pakistan?

Pakistan textile industry is booming with exports soaring 27% to more than $6 billion in the first four months (July-October) of the current fiscal year. “We believe that $5 billion investment (in textile industry) in the Musharraf era would be matched in the next six to eight months”  says Zubair Motiwala, a leading textile industrialist and chairman of Businessmen Group (BMG), as quoted in the Pakistani media reports. Pakistan textile exports more than doubled from $5.2 billion to more than $11 billion during Musharraf years. Exports soared 19.43% in 2001, 20% in 2004, 24.5% in 2005 and 11.23% in 2006, all on President Musharraf's watch, according to "The Rise and Fall of Pakistan's Textile Industry: An Analytical View" published by Javed Memon, Abdul Aziz and Muhammad Qayyum.     


Pakistan Textile Exports Growth. Source: Javed Memon

Pakistani government officials report that the textile sector has invested $3-3.5 billion on modernization and expansion in the last 2-3 years and the investment is likely to match the $5 billion that was witnessed during Musharraf era when the sector was undergoing major modernization, balancing and replacement (BMR). Textile machinery imports jumped 110% in the last four months, according to the Pakistan Bureau of Statistics (PBS). Capital equipment imports are contributing to Pakistan's widening trade gap

Pakistan Textile Exports Boom. Source: Bloomberg

All sectors of the textile industry from yarn to fabric to ready-made garments are experiencing double digit growth.  Ready-made garments exports jumped 22.34% during July-Oct 2021,  knitwear exports soared 35.45%, bed-wear posted positive growth of 21.30%, towel exports were up by 14.17%, cotton cloth rose 18.54%. Among primary commodities, cotton yarn exports surged by 71.39%, while yarn other than cotton by 114%. The export of made-up articles — excluding towels — rose by 11.55%, and tents, canvas and tarpaulin dipped by a massive 23.98% during the 4-month period.

International Comparison of Textile Machinery Imports. Source: Business Recorder


History of Pakistan Textile Machinery Imports 2004-2021 in Millions of US$. Source: Ali Khizar


The textile industry is very important for Pakistan's economy. It is a very large employer and contributes nearly 10% of GDP.  Textile exports account for more than half of Pakistan's exports.  Unfortunately, the textile industry has stagnated in the last 12 years. Textile boom is good news for the country's economy. 

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan's Debt Crisis

Declining Investment Hurting Pakistan's Economic Growth

Brief History of Pakistan Economy 

Can Pakistan Avoid Recurring IMF Bailouts?

Pakistan's Lost Decade 2010-20

CPEC Financing: Is China Ripping Off Pakistan?

Information Tech Jobs Moving From India to Pakistan

Pakistan is 5th Largest Motorcycle Market

"Failed State" Pakistan Saw 22% Growth in Per Capita Income in Last 5 Years

CPEC Transforming Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Home Appliance Ownership in Pakistani Households

Riaz Haq's YouTube Channel

PakAlumni Social Network


56 comments:

Salman said...

This year cotton got bumper crop with 6.8 M bails.

Moreover, 100 new Textile related Factories worth 5 B USD are under construction (which will impact a handsome amount in our export)

Tanveer K. said...

Is it true $5 B investment will create 5 mil jobs?

Riaz Haq said...

TK: "Is it true $5 B investment will create 5 mil jobs?"

It will be in millions but I’m not sure about the exact number of jobs that will be created with new advanced textile machinery now being purchased by Pakistan’s industry as part of its modernization and expansion

Riaz Haq said...

From Twitter:

Samiullah Tariq
@samigodil
Cotton arrivals are up by 70% YoY to reach 6.8mn bales compared to 4mn bales last year. Higher production plus higher prices should support farm income, industrial activity and exports

https://twitter.com/samigodil/status/1461227968957534212?s=20

Tanveer K. said...

As per Gohar Ijaz (APTMA) it does.

Billion produces a mil job and they are pumping $5B in the textile industry.

Riaz Haq said...

A Mitchell
@aem76us
·
6h
Replying to
@haqsmusings
Last year I benchmarked PK's leading law firms vrs textile houses. Lawyers all use .COMs, which allows them to rank and be found globally on Google search.

The textile houses all use .PKs, which only guarantees they'll be found inside PK - unless they pay for Google Adsense ads.

Riaz Haq said...

Production of home appliances soars

https://www.dawn.com/news/1629800

KARACHI: Easing of lockdown and rising heatwave have caused a sharp rise in production of home appliances with refrigerators hitting a 32-month high in April, followed by 19-month high in air conditioners and 22-month in deep freezers.

Production of refrigerators during April soared to 131,953 units from 6,996 units in April 2020 while in March the production was 119,535 units, showed Large-Scale Manufacturing (LSM) data.

Production of air-conditioners soared to 62,953 units in April as compared to 5,246 units in April 2020 while in March the production stood at 35,418 units, showing a jump of 78pc MoM.

Deep freezers sales also saw a strong rebound, rising to 11,732 units in April 2021 from 1,048 units in April 2020 while March 2021 production stood at 7,236 units.

According to a financial analyst at a brokerage house, demand for electrical goods is rising after tapering off the Covid-19 led lockdown which is much evident from LSM figures of April. Production of other power sector electrical goods such as electric transformers and meters production also witnessed strong rebound in April.

Shafaat Hussain said...


مہنگائی کے اس شور میں یاد دلاتا چلوں کہ پاکستان میں ایئر کنڈیشنر، فریج، ڈیپ فریزر اور الیکٹرک پنکھوں کی پیداوار میں اضافہ ہوا ہے۔ اس کے علاوہ گاڑیوں، موٹر سائیکل اور ٹریکٹر کی فروخت میں بھی اضافہ ہو رہا ہے.

یہ کوئی چاند سے آکر شاپنگ کر رہا ہے؟

#PakistanMovingForward

https://twitter.com/sshabdali/status/1461404359292600321?s=20

samir sardana said...

Mr Haq says "Unfortunately, the textile industry has stagnated in the last 12 years. Textile boom is good news for the country's economy"

The textile industry has stagnated - BUT the assets have been sweated to the maximum, and the management has innovated,to cut costs,and just survive competition,in the last 10 years

The Textile boom ,s due to COVID and the supply chain disruptions,across the world,and the COVID resurgence,across the US and EU - and there are many more CVOIDs,in the pipeline. Pakistan is integrated across the cotton supply and value chain,over a limited land mass, and so,is not impacted by supply chain shocks,INSIDE Pakistan

So this is the right time to invest in Technology ! Low cost of capital (just before the rate hikes),easy credit in global markets,limited orders with technology suppliers and the BOOM IN THE TEXTILE SECTOR.

Top that with the USD/PKR,and so,Pakistan has never had it better,and the exponential improvement in the credibility and brand,of the Pakistani nation and Pakistani managers and engineers,in the West and the USA,and the personal credibility of IMK.

Happy Days are here again ! dindooohindoo

Jiye Jiye Pakistan !

Riaz Haq said...

Pakistan Receives $635 Million by Exporting the Information Technology Services

https://www.phoneworld.com.pk/pakistan-earns-635-million-by-exporting-the-information-technology-services/


The Pakistan Bureau of Statistics is a federal agency of the Government of Pakistan tasked with providing reliable and comprehensive statistical research as well as commissioning national statistics services. According to figures from the Pakistan Bureau of Statistics (PBS), the exportation of Information Technology services increased by 40.90 percent between July and September 2021, rising from $348.4 million in the previous financial year to $490.89 million this year. During the first quarter of the financial year 2021-22, Pakistan earned more than $635 million by supplying various IT services to different countries

-------------
Ovais
@Sabbandkardo
·
2h
Pakistan IT Exports in OCT 2021 were 195 M$
The momentum of IT exports persisted and IT exports are projected to reach around 2.5 B$ by FY end .
Pakistan should aim to reach 5 B$ soon
#PakistanMovingForward

https://twitter.com/Sabbandkardo/status/1461707968664285188?s=20

Riaz Haq said...

Baqir projects sustainable growth

https://tribune.com.pk/story/2321444/baqir-projects-sustainable-growth

Contrary to previous years, Pakistan’s economic growth will be sustainable this time around due to a persistent uptrend in remittances, robust inflows through Roshan Digital Accounts (RDAs) and expected rise in exports owing to the refinance facility, said State Bank of Pakistan (SBP) Governor Reza Baqir.

Speaking at a session titled “The Future of Pakistan’s Economy” at the Leaders in Islamabad Business Summit on Wednesday, Baqir said that the textile sector was aiming to enhance exports by $5 billion after the modern machinery imported with the help of Temporary Economic Refinance Facility (TERF) was installed.

He added that the foreign exchange reserves were climbing due to the receipt of robust remittances and hefty inflows via RDAs. He cherished that on average 1,000 RDAs were being opened every day.

The governor expected the economic growth to consolidate further following capacity expansion of the export-oriented industry as businessmen were upgrading their units with state-of-the-art equipment imported under TERF.

Talking about how monetary and fiscal policies would aid the ongoing growth momentum, the SBP governor pointed out that SBP’s policies had begun responding immediately to the deterioration in macroeconomic indicators.

“The current account deficit has been rising since June 2021 and the exchange rate began adjusting in May, therefore, our policies are responding in a timely manner,” he said. “We now have a market-based exchange rate and it acts as a natural shock absorber.”

He lamented that macroeconomic policies were delayed in previous years whenever imports rose and the current account deficit widened and as a result, the government had to devalue the rupee.

“When imbalances increase and corrective decisions are delayed, difficult measures need to be taken,” he said.

He was of the view that immediate and timely responsive measures would aid the sustainability of growth.

Riaz Haq said...

#Pakistan providing subsidies, incentivizing #construction industry. #imrankhanPTI: Rs 35 billion allocated for low income buyers. Rs. 300,000 subsidy on every house for the first 100,000 homes. #NayaPakistan #economy https://www.pakistantoday.com.pk/2021/11/19/govt-providing-subsidies-incentivising-construction-industry-pm/ via @ePakistanToday

While visiting Naya Pakistan Housing Authority’s project Farash Town Apartments in Islamabad on Friday, Prime Minister Imran Khan expressed the government is providing subsidy and incentivising construction industry to help low income people to have their own houses.

The prime minister said thirty-five billion rupees have been allocated for subsidy on construction of houses by the low income people. He said the government will provide three hundred thousand rupees subsidy on every house for the first one hundred thousand units.

He said while one hundred thousand apartments are under construction, the process will now speedily move forward as the structure of the system has been finalised.

He said the construction industry has been incentivised in different ways including tax relief. He said One Window Operation has also been started to facilitate the construction sector.

Regarding Farash Town, the prime minister said of the total 4400 apartments, 2000 each have been allocated for low income people and middle income people and four hundred apartments will be provided to slum dwellers.

The premier, while chairing a separate meeting, said Ravi Urban Development Authority and Central Business District projects will promote modern, self-sustained, clean and green residential and business facilities in the country.

The PM said these projects are very crucial for attracting foreign direct investment in housing and construction sectors in the country. The prime minister directed the authorities to win over maximum investment for both the projects.

Earlier, the prime minister was informed that work on the development of basic infrastructure including roads, sewerage and drainage in the Central Business District is in full swing and is likely to be completed ahead of schedule. The construction work on Bab-e-Pakistan Project will also start soon.

The prime minister was apprised that the Ravi Urban project is all set to develop its Saphire Bay Project. A state of the art industrial estate, powered by renewable energy, is also ready to be launched very soon.

samir sardana said...

SBP should not use the TERF,to make capital goods imports,of textiles.

This is the time to use the Nuclear financing option,wherein the payments to the vendors, are paid over 15-30 years

US/EU have several schemes for Export financing,forfaiting and Credit risk mitigation, on exports.Textile machine suppliers,should obtain deferred financing,from US/EU institutions, which are secured and risk mitigated, by BG or LC or letters of comfort,from Pakistani banks (in turn confirmed by foreign banks)

Thus,the capital goods imports,will be paid from the INCREMENTAL TEXTILE EXPORTS,from the said technology - which will make it FX neutral,and have no impact on the USD/PKR.

This is also the time to open up the textile sector,to FDI/FPI/FIIs,with full repatriation of profits and tax holidays.The benefits of the flow of USD,into and out of Pakistan,is the biggest gain,and then comes,the dissemination of international best practices,and the culture and environ,of creativity and enterprise.

The 1 industry,which can be viable in Afghanistan, and which can employ women, is knitwear and towels.Leveraging the consolidated textile supply chain of Pakistan and Afghanistan - to engineer a COO,in Afghanistan - should provide a negative duty access,to the EU.

Providence is with Pakistan ! dindooohindoo

Jiye Jiye Pakistan !

Riaz Haq said...

From Twitter:

Arif Habib Limited
@ArifHabibLtd

During Oct’21, technology exports was up 29% YoY to $ 195mn. During 4MFY22, technology recorded exports worth $ 830mn contributing 39% to the overall services’ export and marking a 39% YoY jump.

@StateBank_Pak

@Hammad_Azhar

@aliya_hamza

@MuzzammilAslam3

#Pakistan #Economy #AHL

https://twitter.com/ArifHabibLtd/status/1461747220114550791?s=20

Riaz Haq said...

Pakistan needs to create export culture: Dawood
Emphasises all departments should facilitate exporters to boost exports

https://tribune.com.pk/story/2329944/pakistan-needs-to-create-export-culture-dawood

KARACHI:
Although Pakistan’s exports are rising due to favourable government policies, the country needs to create an export culture to give it a further boost, said Adviser to Prime Minister on Commerce and Investment Abdul Razaq Dawood.

Speaking at a press conference on Wednesday, Dawood said that the creation of export culture was a major task for the Ministry of Commerce.

To achieve the desired objective, all departments like the Federal Board of Revenue (FBR), ports as well as the government should facilitate the exporters, he said.

“Again and again, we go to the IMF to get dollars as we are short of foreign exchange,” he lamented.

Last year, Pakistan’s exports increased 30% year-on-year while information technology exports registered a rise of 47%, Dawood said. This year, IT exports have surged 45% year-on-year so far.

Pakistan’s overall export target for FY22 is $38.7 billion including $20 billion in textile exports.

He voiced hope that the country would make $38 billion worth of exports, with $31 billion in goods shipments and $7 billion in services exports.

He underlined that under the diversification policy, Pakistan witnessed a 77% surge in exports of non-traditional products to the unconventional markets.

However, the increase was not phenomenal in the traditional markets, he said, adding that it would take up to five years to reap full benefits of the policy.

“We are exactly on target,” Dawood remarked and emphasised the need to instill export culture in every sector so “everybody should have export in their mind, right from the FBR to the people working in farms.”

Stressing the importance of export diversification, Dawood said that Pakistan was targeting new markets such as Central Asia, Kenya and Nigeria.

“We had been to Nairobi, but could not follow up due to Covid-19,” he said.

The adviser revealed that around 115 businessmen from textile, engineering, IT and other sectors would be visiting Nigeria, where a series of business-to-business meetings had been arranged along with a conference and an exhibition.

Pakistan needed regional connectivity like the European Union, where member countries had 80-90% regional trade, he said, adding that Pakistan’s regional trade stood at only 5%.

Dawood highlighted that currently cargo trucks went through numerous loading and unloading phases at the borders.

Quoting an example, he said that cargo trucks from Uzbekistan arrived in Afghanistan and from there the goods were loaded on to Pakistani trucks.

He was of the view that cargo trucks should travel directly to their destinations in order to save time and the hassle of loading/unloading.

“In the next five to six months, we will streamline this,” he remarked.

Recently, two cargo trucks travelled from Karachi to Turkey and Azerbaijan, while one truck reached Moscow directly, he revealed.

Around 40% of the raw material was being imported at zero duty “but it is less than what we need”, he said.

Dawood highlighted that Pakistan collected 47% of duties at ports, while Bangladesh and India collected 27% of duties at ports. “The more you collect duties at the import stage, the more there is a bias against export.”

Answering a question about the prevailing gas crisis, he said “no doubt gas is a big issue.”

The supply of gas to any industrial unit that had a captive power plant would not be discontinued, he said. “Those working purely on electricity may face gas load-shedding.”

samir sardana said...

Riaz Haq said "Dawood highlighted that Pakistan collected 47% of duties at ports, while Bangladesh and India collected 27% of duties at ports. “The more you collect duties at the import stage, the more there is a bias against export.”

As a basic principle of international law,goods imported for exports and raw materials imported for manufactured exports - cannot be taxed - at any entry port.But some nations tax it,on account of the following:

Working capital for the state (id.est., the importer nation,taxes the import and refunds it, after 12 months - once the item is exported - also called duty drawback and terminal duty refund)
Revenue - The Importer nation,taxes the imports to earn revenue
Local prices of imports - Where the gap between the CIF rates,of the imports and the local import nation prices,are huge - there is an import tax,by the import nation,to ensure that the importer does not dump the imported item,in the local markets
Credibility of exporters - Wherein the industry - which has imported the item - has a credibility of such a low order,that the state does not want to provide the said industry,with the right of duty free imports

However,to save the time and cost in exports and logistics,and obviate corruption and crash the cost of tax administration,EXPORTERS SHOULD BE ALLOWED DUTY FREE IMPORTS - with LUT AND BG,and the State should MAKE FRAUDULENT MISUSE AND DIVERSION OF DUTY FREE ITEMS - A NON BAILABLE OFFENCE.

Burdening the entire export supply chain and costing,due to the fraud or the possibility of fraud by a few exporters,and thus,imposing duties and TBT on imports,destroys exports competitiveness.dindooohindoo

And that is what Mr Dawood means,in the context of taxes on imports,at ports.And the same thought process,is required for all exports, across the export supply chain.

samir sardana said...

Mr Haq said "Pakistan needed regional connectivity like the European Union, where member countries had 80-90% regional trade, he said, adding that Pakistan’s regional trade stood at only 5%"

EU is a economic,fiscal and monetary union.Central Asia,the Caspian and the Russian Federation,is NOT,and geopolitics makes it unlikely,for a long time - unless there is a tectonic economic or military event or accident

The lack of that union,is an OPPORTUNITY for exports,from Pakistan to Central Asia,as the import and transaction costs,for those nations,within that region,are high due to the inefficiencies,in trade and commerce and taxation.But these opportunities will be transient - as no nation's export strategy,can be predicated on the inefficiences and arbitrage,of a target market.Also that region is rich in gas and hydrocarbons,and so energy costs are much lower than in Pakistan.

Pakistani companies can set up units in the Caspian,to export to Pakistan,the import requirements of Pakistan, thereby leveraging on the lower energy costs in the Caspian. Also, for Pakistani exporters,having an export unit in Cent Asia,reduces the risk of supply chain disruptions,in export orders,from Pakistan,due to gas and electricity issues,in Pakistan.

The REAL target for Pakistan exports,has to be US/EU.

Stand alone and Multi Modal logistics costs - especially in trucking - across Central Asia and the Caspian,will always be a problem.The Biggest problem is the local logistics providers.In small nations with limited logistics services - there is no threat perceived by local providers - but in Pakistan - the local transporters will NOT allow foreign plates,to toll the roads - let alone,take backhaul cargo,on the way out of Pakistan.

There is also the risk,that the foreign plated trucker,provides a ultra low discounted rate, to take cargo from Pakistan to Uzbek (as there is no backhaul from Torkham)- which will wipe out the Pakistani truckers.That is the opportunity for Global Logistics companies, in case of regional trade.Such synergies will make road costs,cheaper than rakes, especially for palletised and containerised cargos.

Once Central Asian and Caspian trade accelerates,then Rakes will be cheaper than roads - and that will blow a hole,into road logistics.Rakes are owned by the state,and the Road transport logistics,is owned and controlled by POLITICIANS - and that is why,all RAKE LINKAGES ACROSS NATIONS,ARE DELIBERATELY SCUTTLED,and that also,SCUTTLES THE OPPORTUNITIES IN MULTIMODAL LOGISTICS - leaving enterprise,at the mercy of road logistics.

That is where the CPEC cones in.It will force the build up and streamlining and integration of the regional logistics value chain from Persia,Pakistan to Central Asia, powered by rakes,run on low cost power,across the regional power surplus grids of Central Asia.That will change the international trade dynamics,forever.dindooohindoo

samir sardana said...

For Pakistan,it is key to ELIMINATE India,from Central Asia.The pipedream of the Chaiwala, of the gas and energy corridor,from Central Asia and Russia,is now blown,to smithreens - but the Bania will not give up !

What the Indian vermin will do next,is to tap the energy,and convert it to power (as gas corridors are unviable) - which is easy,and several Indian PSUs like NTPC etc and PGC can set up power plants and grids in Central Asia.

Then the Chaiwala will set up industries in Central Asia,to use that power to OBVIATE IMPORTS INTO CENTRAL ASIA,AND ALSO MAKE IT AN EXPORT HUB - using the entire matrix of SEZs etc.Chaiwala might also set up industries,in Central Asia,to target the export market of Pakistan.

Which is Y Chaiwala and India has to be eliminated.

Therefore,the plan of Chaiwala can be replicated by PRC and CPEC,whereby the Power capacities and Grid capacity and efficiency, is raised exponentially in Central Asia,to make consumer Goods for Central Asians,fed by intermediate inputs supplied by CPEC and transported,by the electric grid.

Similarly,energy intensive intermediates required by CPEC,to make export goods for US/EU, can be imported from the PRC funded Central Asian SEZs

The PRC Central Asian SEZ,can also feed the Russian Federation.

So we have a natrix of SEZs and Rakes (E-powered) across Central Asia.Once the gas is used up - Chaiwala will have no gas,to build a gas corridor.

Pakistan and PRC,have to erase the Indian entity,from the map.Jiye Jiye Pakistan !

Indians have to make toilets for their people - as a first step - that is the 1st verse of the Book of Genesis !

Chaiwala is the largest gas producer in the world - he had gassed all his life - from the Rs 15 lacs,for every dumb Indian ! Indians still vote for this gaspot - whose place was in the shit pot (where he was born - as a result of a prolapsed uterus)




samir sardana said...

With COVID relapse in Germany,the next frontier for Pakistan is AU.In the 1st step,the Pakistan manufacturers can set up down stream manufacturing units,in AU,for the local market - which is an import substitution product.

The import duty rates in AU can be modified,to lower import rates of intermediates,to make manufacturing viable,in the AU nation.

Once the synthesis of the local labour,quality and management stabilises - then the next step is to shift the Pakistan manufacturing export value chain,to select AU nations,with no shortage of energy,at a low cost.That unit can be stand by export unit for exports to EU.

Therefore,once a Pakistan EOU in Karachi has made its dent and brand in the US and EU - but cannot serve the potential market,due to energy and other bottlenecks in Pakistan,it needs AN ALTERNATE EOU BASE OR A MANUFACTURING BASE.

THAT BASE IS AU - which might also provide fiscal and monetary subsidies for export to EU from AU.

There is 1 more strategic advantage of an AU base.When oil prices crash - most AU nations FX crashes - and that will drastically lower the USD costs,in AU (As wages etc., will be in local FX),and increase the NSR on exports (due to FX depreciation).In Pakistan,when Oil falls, PKR rises,and THUS DENTS the NSR ON EXPORTS,especially as the imported content,was booked at higher FX rates !

So the Pakistani corporates,can maximise the treasury and NSR,as an integrated unit,spread from Pakistan to the AU.

The ideal combo is PRC funds + Pakistan management and engineers + AU labour. Africans find it difficult to work with the Chinese,as the Chinese work ethic and efficiency standards, are too stiff.

PRC can build the basic materials and infra sector,as that involves,huge political risk.

The PRC and Pakistan combo,can be the ideal formula,for investments in the AU - and that will also wipe out the Indians,from the AU and South Africa.

Indians are a race of shopkeepers - bania vermin - and soon the people of the AU will realise the worth of these vermin - AFTER Indian INDUSTRIALISTS IN AU,are WIPED OUT,by the PRC-Pakistan combo.

There is a limited awakening in South Africa and will accelerate soon

https://www.sowetanlive.co.za/opinion/letters/2021-06-14-malemas-anti-indian-rants-could-fan-violence/

In the last 5000 - there was only 1 man born in India,who set up a Non-bania operation outside India.That man is called LN Mittal - and even HIS SON,HAS REALISED THE WORTH OF HIS NATION ! HE SAYS THAT HE IS NOT AN INDIAN MNC HEAD !

https://timesofindia.indiatimes.com/world/uk/we-are-not-an-indian-mnc-aditya-mittal/articleshow/2510191.cms

THE DAY HE NAMES ARCELOR - MITTAL STEEL - THAT COMPANY WILL ALSO BE WIPED OUT !

PRC AND PAKISTAN - CAN WIPE OUT INDIAN INDUSTRY ON LAND,AIR,SEA AND UNDER THE SEA AND UNDER THE LAND !

ELIMINATE THEM ! THAT IS THE DESTINY OF PRC AND PAKISTAN - WHICH EXPLAINS THE FUSION,OF THE
MONGOLS,THE TURKS,AAFGHANS AND PERSIANS - WHICH LED TO THE RAMPAGE OF THE HINDOOS,FOR 1000 YEARS !

THAT WAS THE GOLDEN PERIOD OF THESE INDIAN VERMIN !

RESTORE THE INDIANS TO THEIR GLORY !

Anonymous said...

https://indianexpress.com/article/india/textile-apparel-orders-especially-from-us-power-india-export-surge-7487842/

Exports are riding everywhere because of covid end shopping in US.

Riaz Haq said...

Interloop divests from Bangladesh operations

https://profit.pakistantoday.com.pk/2020/11/28/interloop-divests-from-bangladesh-operations/


Why is it that if one looks at the tags of clothes bought in Europe, they will invariably say ‘Made in Bangladesh’? Entirely European fast fashion brands like Zara (which is a Spanish retailer) will manufacture their clothes in Bangladesh.

There is a specific reason for this, and not just the usual developing world cliches of ‘cheap labour’ and ‘advantage in cotton’. Technically speaking, Bangladesh has been part of the World Trade Organisation since 1995. But in 2001, it would make a decision that would alter its fortunes for the better. That year, the country signed the ‘EU-Bangladesh Cooperation Agreement’ with the European Union. That agreement provides broad scope for cooperation, extending to trade and economic development, human rights, good governance and the environment.

But the real benefit, of course, was trade. Bangladesh was to receive duty-free access to EU markets under a programme known as the globalised scheme of preferences (GSP), designed to help developing countries grow through trade. The country has the most generous level of GSP, aimed at least-developed countries.

And it worked. For instance, in 2015, the EU accounted for 24% of Bangladesh’s total trade. Over 90% of the EU’s total imports from Bangladesh were in clothing. More impressively, between 2008 and 2015, EU imports from Bangladesh trebled from €5,464 million to €15,145 million, which represented nearly half of Bangladesh’s total exports.

One textile company in Pakistan took notice: the sock moguls, Interloop. The company is one of Pakistan’s fastest-growing and most exciting textile companies, and let us explain why.

--------------

The natural conclusion from this expansion was to look at who had favourable relations with Europe. Enter Bangladesh. That is why in 2010, the company set up IL Bangla Ltd, a vertically integrated hosiery plant with a monthly production of 3 million pairs of socks.

This made Interloop one of the first Pakistani companies to set up operations in Bangladesh to take advantage of the tariff-free access to the EU that Bangladesh got.

Incidentally, the government of Pakistan has been trying for the past two decades to get that same GSP Plus access to the European Union’s market, without success. Part of that has to do with the fact that the EU demands changes in legal structures to protect human rights, including the abolition of the death penalty.

Under the Zardari Administration, from 2008 through 2013, Pakistan had a moratorium on the death penalty, but did not actually abolish it. The EU came close to considering offering GSP Plus status to Pakistan, but then, when Pakistan started executing people again after the 2014 attack on the Army Public School in Peshawar, the EU withdrew that offer.

And all of this is becoming relevant now, because in a notice sent to the PSX on November 18, Interloop said it would divest from the operations.

Apparently, whatever magic advantage they thought would appear from investing in Bangladesh had simply not appeared. In fact, for the last few years, “market conditions had made its ongoing operations untenable, and the unit is in losses for quite some considerable time, and as a consequence it is imperative the company divest its investment, and use that resource in some profitable venture.”

Currently, Interloop holds 31.61% of IL Bangla’s shares. The sale of assets and winding up process will be according to the laws of Bangladesh.

It turns out that despite Interloop’s track record, and high expectations of its Bangladeshi venture, it simply could not reap the regional promises it thought it could. No more made in Bangladesh socks then; simple made in Pakistan socks (with all the not so nice duties), for now.

Riaz Haq said...

The European Commission has retained Pakistan in its preferential trade access scheme while finding no grounds to exclude the country on demand of the European Parliament that passed two resolutions to review the Generalised Scheme of Preference-Plus (GSP+) status.

https://tribune.com.pk/story/2321501/gsp-status-for-pakistan-extended

The extension will provide a relief to Pakistan, as the reduced rates of duties and taxes by the European countries under the preferential treatment has helped Pakistan to secure additional exports in the range of 1 billion to 1.5 billion euros a year since 2014.

The announcement was made by the European Commission (EC) on Wednesday from Brussels, Belgium. The commission has extended the Generalised Scheme of Preferences-Plus (GSP+) status to Pakistan till 2024, it said.

Media reports suggested that the commission attached six new conventions, mostly related to greater accessibility for people with physical disability, eradication of child labour and environmental safety.

Pakistan was granted GSP+ in 2014 and has shown commitment to maintaining ratifications and meeting reporting obligations to the United Nations Treaty Bodies for the 27 UN conventions.

The EU is Pakistan’s first export destination, absorbing over a third (34%) of Pakistan’s total exports to the world in 2018, followed by the US.

According to the media reports, the EC reviewed the status of several countries for the extension of the preferential status. However, it added that Pakistan’s individual status was not discussed.

According to a statement on Wednesday, the EC proposed that developing countries wishing to prosper from access to EU markets should uphold environmental and governance standards and adhere to extra commitments on human and labour rights.

The statement said that GSP+, with zero tariffs on two-thirds of products, was offered to a group of countries, including Pakistan and The Philippines that implement 27 international conventions on human and labour rights, the environment and good governance.

Pakistan’s exports to EU decreased in 2020 by over 9% but the extension has provided an opportunity to Islamabad to take maximum benefit from the scheme in the remaining period.

Under the commission’s new proposal, which covers a 10-year period from 2024, six new conventions will be added, including the Paris climate change agreement and ones covering rights for people with disabilities and trans-national organised crime.

Pakistan has been showing greater commitment to climate change and its recent drive can facilitate the new EC conditions.

In March 2020, the EU had extended Pakistan’s GSP plus status till 2022. The commission noted that Pakistan had made considerable progress when it came to labour laws and tackling climate change — two important conditions for the continental bloc to grant or extend a GSP+ status.

Since April this year, the European Parliament has passed two resolutions with an overwhelming majority to review Pakistan’s GSP+ status. However, the resolutions could not convince the European Commission to suspend its GSP+ status for Pakistan.

The European Parliament resolution of September 16, 2021 on the situation in Afghanistan gave more direct warning. The September resolution questions Pakistan’s role in “provision of safe havens for Taliban” and instructed the European External Action Service (EEAS) to consider if there was reason to immediately review Pakistan’s eligibility for GSP+ status in the light of current events.

The European Parliament had expressed its concern about the safety of Afghan nationals at high risk and those crossing to the neighbouring countries over land borders, in particular to Pakistan; and regretted the lack of coordination by the international community.

Riaz Haq said...

If you walk into a clothing store in any shopping mall in a major Chinese city – whether it is an international or a local brand – “Country of Origin: Pakistan” hang tag is not uncommon.

Especially in the jeans wear section, these high-quality Pakistani products are increasingly popular with Chinese consumers.

https://tribune.com.pk/story/2330653/china-to-bolster-textile-sector

According to the Pakistani government, the textile industry contributes nearly 60% to the country’s total exports. Denim fabric, as one of Pakistan’s main garment products exported to the world, occupies a pivotal position in its garment industry chain.

According to the Pakistan Bureau of Statistics (PBS), exports of denim fabric from Pakistan reached Rs96.92 billion during the year 2017-18, a commendable performance of the denim sector.

However, whether it is jeans wear or other garment products, the impact of recent global cotton prices and other factors cannot be ignored.

Pakistani industrialists argue that the textile and garment industry of the country faces a series of challenges, including low production of cotton and difficulty in obtaining financing for new facilities.

Cotton industry: China-Pakistan cooperation

Pakistan, one of the world’s largest cotton producers, is finding it increasingly hard to meet its own needs.

“Last year, we had to import more than 50% of cotton,” said Sapphire Fibre Executive Director Muhammad Abdullah. Low production and quality force the local industry to choose imports.

“So far, the domestic consumption of cotton is 14 million bales. Nevertheless, Pakistan only harvested 5.6 million bales of cotton in the last season,” he said.

“As far as I am concerned, the seed of high quality must be the top priority. Unless we can increase the yield per unit area, the demand cannot be met,” he added.

The idea of Muhammad Abdullah was echoed by Central Cotton Research Institute Director Zahid Mehmood. “Under CPEC, we hope to see the plan between China and Pakistan in cottonseed cooperation soon,” he said.

Regarding this, Xinjiang Agricultural University Deputy Dean Chen Quanjia introduced further planning during an interview with China Economic Net.

“Local high temperature-resistant cotton varieties in Pakistan are of great use to us,” Quanjia said. “In Xinjiang, the heat resistance of cottonseed is particularly indispensable when facing the extreme high temperature. At the same time, our high-yielding cotton varieties are also needed for Pakistani farmers,” he said.

Recently, international cotton futures have remained high, and China’s domestic cotton futures prices have also risen simultaneously.

According to a survey conducted by the China Cotton Association, the country’s cotton planting area this year has dropped year-on-year, but due to favourable weather conditions, the total output remains relatively stable.

It is expected to be 5.83 million tons, down 1.5% year-on-year. Improving cotton production to maintain the stability of the futures market will be a problem, demanding prompt solutions from China and Pakistan.

Besides, the impurity, which is caused by 100% manual picking, also worsens the dilemma of Pakistan cotton.

Sapphire Fibre cotton field supervisor Kamran Razaq said that the impurity content of imported cotton is 4.5%, while the counterpart in Pakistan cotton is 8-9%, which is well below the criteria of textile mills.

Accordingly, Xinjiang Agricultural University and University of Agriculture Faisalabad (UAF) have set up experimental fields in Faisalabad and plan to test mechanical picking in Pakistan.

“In north Xinjiang, one of the biggest cotton areas in China, the mechanisation can reach 90%. We use machine picking everywhere so as to decrease the impurities,” Chen Quanjia said, adding that in future, China’s advanced cotton pickers can play a role in Pakistan as well.


Apart from raw material shortage, financing difficulty is also a restraining factor in Pakistani textiles. In this regard, China and Pakistan are seeking for a wider cooperative space.

Riaz Haq said...

"Pakistan’s ..demonstrated access to external financing...offset rising external risks from a widening current-account deficit..reforms...could create positive momentum for the sovereign’s ‘B-’ rating, which we affirmed in May 2021 with a Stable Outlook"
https://www.fitchratings.com/research/sovereigns/reforms-financial-support-ease-pakistan-sovereign-risks-24-11-2021

Fitch Ratings-Hong Kong-24 November 2021: Fitch Ratings believes Pakistan’s recent policy adjustments and demonstrated access to external financing, as well as its commitment to a market-determined exchange rate, offset rising external risks from a widening current-account deficit. Ongoing reforms, if sustained, could create positive momentum for the sovereign’s ‘B-’ rating, which we affirmed in May 2021 with a Stable Outlook.

Increases in global energy prices and a strong domestic recovery from the initial Covid-19 pandemic shock have put additional strains on Pakistan’s external position. The current-account deficit in the fiscal year to June 2022 is set to be wider than our previous forecast of 2.2%. The State Bank of Pakistan (SBP) on 19 November 2021 raised its policy rate by a significant 150bp to 8.75%, pointing to rising risks related to the balance of payments and inflation.

We think external liquidity pressures should be manageable in the near term, despite the wider current-account deficit, given Pakistan’s adequate foreign-exchange reserves and success in accessing financing.

Official reserve assets nearly doubled to USD24.1 billion by end-September 2021 from USD12.6 billion two years ago. However, liquid foreign-exchange reserves have dropped since mid-September, which we believe may partly reflect debt repayment.

Pakistan’s near-term financing efforts have been supported by Saudi Arabia, which plans to place USD3 billion on deposit with the SBP and provide an additional USD1.2 billion oil-financing facility under a one-year support package. Its foreign reserves also received a USD2.8 billion boost in August from the IMF’s one-off global allocation of Special Drawing Rights.

Funding from these sources followed Pakistan’s successful international debt issuance through a USD2.5 billion bond in March 2021 and a follow-on USD1 billion bond as part of its global medium-term note programme. Pakistan aims to tap debt markets more regularly through the scheme, which could reduce the costs of coming to market. The authorities also plan new sukuk issuance in 2021.

Riaz Haq said...

Engro Corporation
@EngroCorp
·
Dec 10
With the addition of new 100,000 tons PVC III Plant, inaugurated by PM
@ImranKhanPTI
, Engro Polymer & Chemicals will now contribute around $240 million towards import substitution per annum, and fulfill export orders as well.


https://twitter.com/EngroCorp/status/1469376775914459141?s=20

-------------------

Prime Minister Imran Khan inaugurated on Friday a 100,000-tonne PVC III plant of Engro Polymer and Chemicals (EPCL), which will enable import substitution of polyvinyl chloride (PVC) and boost exports, a press release said.

Addressing the ceremony, Prime Minister Khan said the government supports the expansion of local businesses in order to ensure import substitution and achieve higher exports. He urged the business community to focus on import substitution and diversification of the export base to support sustainable economic growth.

A subsidiary of Engro Corporation, EPCL is the only fully integrated chlorvinyl chemical complex and producer of PVC in Pakistan.

The plant expansion took place with up to $50 million financing support from the International Finance Corporation (IFC) and leveraged global expertise in project execution with a Japanese licenser and Chinese construction team.


EPCL can now produce 295,000 tonnes of PVC per annum. The press release said EPCL will now be contributing around $240m towards import substitution.

The company also exported PVC resin worth $25m to Turkey and the Middle Eastern markets in 2021. Demand for PVC has grown at six per cent a year, with around 70pc of the consumption originating from the construction sector.

https://www.dawn.com/news/1663146

Riaz Haq said...

Pakistan exports beat half-year target

https://tribune.com.pk/story/2336988/exports-beat-half-year-target

Talking to The Express Tribune, Arif Habib Limited analyst Sana Tawfik said that imports increased 63% year-on-year during July-December 2021 while exports grew 25%.

According to a statement issued by the Ministry of Commerce, exports amounted to $15.125 billion for July-December 2021 against the target of $15 billion.

The statement was issued following a consultative meeting chaired by Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood to discuss the trade trend in December 2021.

The meeting discussed that trade deficit was likely to come down if parliament passed the mini-budget as it would discourage imports following imposition of higher taxes on luxury items.

“Import growth is likely to be reduced along with import value with the resumption of International Monetary Fund (IMF) programme,” the statement added.

“Reduction in trade deficit in the coming months is imminent due to a stringent ongoing review and the checks put in place by financial support providers.”

Talking to The Express Tribune, Arif Habib Limited analyst Sana Tawfik said that imports increased 63% year-on-year during July-December 2021 while exports grew 25%.

The trade deficit almost doubled during the six months under review compared to the same period of last year.

“Imports are expected to slow down on the back of a forecast decline in international commodity prices,” she said. “Keeping in view the measures taken by the government to incentivise export-oriented sectors, we are optimistic that outward shipments will improve further in the coming months.”

She voiced hope that the country would achieve the export target for full fiscal year 2021-22.

Centre for Peace and Development Initiatives (CPDI) CEO Mukhtar Ahmad Ali stated that exports were increasing at a slow pace partly due to a significant increase in commodity prices in global markets.

Exports had remained suppressed until 2018 because of severe energy shortages and the impact of terrorism on the industry, he recalled.

“Following normalisation of energy supply and improvement in law and order situation, exports were expected to jump significantly but it seems that political uncertainty and soaring energy prices have affected investor confidence,” said Ali. “The ongoing gas supply constraints are likely to dent exports.”

He added that additional efforts were needed to increase the range, quantity and value of exportable goods and services.

Arif Habib Commodities CEO Ahsan Mehanti said that the trade deficit had doubled on a year-on-year basis in July-December 2021, therefore Pakistan’s trade performance was unsatisfactory.

However, the export target was met for the half year and the annual target was also likely to be reached due to the expected low impact of Omicron variant of coronavirus on global growth and Pakistan’s exports, he said.

Riaz Haq said...

One of the major initiatives of the government to encourage imports of raw materials also pushed up the import bill. Oil prices have also increased substantially, which pushed up the import bill because of the high demand for energy in the domestic market. A surge was noted in imports of vehicles, machinery as well as vaccines, pushing the import bill.

In FY21, the import bill surged by 25.8pc to $56.091bn from $44.574bn the previous year.
--------

Exports posted year-on-year growth of 24.71pc to $15.102bn in July-December 2021. In December 2021, exports saw a growth of 15.8pc to $2.740bn from $2.366bn in the same month last year. On a month-on-month basis, exports declined by 5.55pc in December.

Export proceeds went up by 18.2pc to $25.294bn in FY21 from $21.394bn over the last year.

According to the commerce ministry, the exports of fish & fish products, plastics, cement, fruits & vegetables, petroleum products, natural steatite, etc increased. In terms of market diversification, there was an increase in exports to Bangladesh, Thailand, Sri Lanka, Malaysia, Kazakhstan, South Korea, etc.

In the traditional sectors, there was an increase in the exports of men’s garments, home textiles, rice, women’s garments, jerseys & cardigans and T-shirts. However, exports of fruits & vegetables, surgical instruments, electrical & electronic equipment, tractors, pearls and precious stones decreased in December 2021 as compared to the same month last year.


https://www.dawn.com/news/1667861/trade-deficit-widens-106pc-in-july-dec



--------------

Arif Habib Limited
@ArifHabibLtd
Country posted highest ever textile exports for the month of Dec.

Dec’21: $ 1.64bn, +17% YoY, -6% MoM
1HFY22: $ 9.40bn, +26% YoY

https://twitter.com/ArifHabibLtd/status/1480415138108870656?s=20

Riaz Haq said...

Shafaat Hussain
@sshabdali
Textile exports in Dec-21 have reached $1.62bn. During Jun-Dec 2021, #Pakistan has achieved $9.38bn, that's an increase of $2.73bn compared to H1FY18 and $1.93bn compared to H1FY21.
This year we are all set to make a new all-time high of $20bn, InshaAllah.

https://twitter.com/sshabdali/status/1483070013816848384?s=20

Riaz Haq said...

Muzzammil Aslam
@MuzzammilAslam3
پاکستان کی تاریخ کی بلند ترین مشینری میں سرمایہ کاری 2021 . مسلم لیگ ن کے پہلے تین سال اور پی ٹی آئ کی پہلے تین سال سرمایہ کاری میں واضع فرق۰ الحمد اللہ!
Translated from Urdu by
Investment in the highest machinery in the history of Pakistan 2021. There is a clear difference between the first three years of PML-N and the first three years of PTI. Praise be to Allah!

https://twitter.com/MuzzammilAslam3/status/1485163856636911617?s=20

Riaz Haq said...

Riaz Haq
@haqsmusings
Replying to
@kaiserbengali
@Asad_Umar
is right! #Pakistan must grow its #exports to deal with its current account imbalances. Meanwhile, please note that Pakistan #textile exports are rapidly changing from yarn and cloth to higher value-added #garments. Also growing #tech #exports by double digits.

https://twitter.com/haqsmusings/status/1485278540568268801?s=20

Riaz Haq said...

#Pakistan’s #Textile #Exports to Surge 40% in Current Fiscal Year as Orders Move From Rivals. Annual Pak Exports of $26 Billion Expected in Textiles Alone. #Bangladesh #China #India #Economy #Trade #Deficit #COVID19 #Pandemic https://www.bloomberg.com/news/articles/2022-01-30/pakistan-s-textile-exports-to-surge-as-orders-move-from-rivals


Pakistan’s textile sector is bringing cheer to its flailing economy, with exports set to swell to a record after gaining an edge over South Asian rivals during the pandemic.

Textile exports are poised to surge 40% from a year earlier to a record $21 billion in the 12 months ending June, according to Abdul Razak Dawood, commerce adviser to Pakistan’s prime minister. Dawood predicted that figure would expand to $26 billion in the next fiscal year, surpassing the nation’s total exports last year, he said.

Riaz Haq said...

At just 30%, #Pakistan has among world's lowest #trade-to-#GDP ratios, leaving lots of room for growth. Most of its export are textiles Pak #exports are relatively more diversified compared to #Bangladesh and #Cambodia, but less diversified than #India's https://www.adb.org/sites/default/files/publication/768386/pakistan-economy-trade-global-value-chains.pdf

https://twitter.com/haqsmusings/status/1493052397496594432?s=20&t=4tOefQ2CRak0Efy2TL9rGA

https://www.dawn.com/news/1674830

Pakistan exhibits one of the lowest trade-to-GDP ratios in the world showing at just 30 per cent. However, it is not all doom and gloom and the country has a lot of room for improvement, according to the Asian Development Bank (ADB).

One viable strategy that Pakistan can adopt to boost its growth is to further open its economy to trade. At just 30pc, Pakistan exhibits one of the lowest trade-to-GDP ratios in the world, even when taking its size into account, the ADB says in its report titled ‘Pakistan’s Economy and Trade in the Age of Global Value Chains’.

This indicates great potential for improvement. Studies have affirmed numerous benefits to economic openness, including opportunities for specialisation, access to wider markets, the inflow of know-how, and the formalisation of the economy.

Existing patterns indicate that Pakistan’s trade is currently oriented to the United States, Europe, and China. It specialises in textiles, though some of its agricultural products are sold to the Middle East. Interestingly, it does not have a significant trading relationship with its proximate neighbours in South Asia. The only economy for which it is a major market is its northern neighbour Afghanistan, the report points out.

While the vast majority of its export products fall under the textiles grouping, formal measures of export concentration suggest that Pakistan’s exports basket is relatively more diversified, especially compared with other major textile exporters like Bangladesh and Cambodia. However, its exports are less diversified than India.

The report used statistics from 2019 since 2020 was an unusual year [owing to Covid-19] portraying a snapshot of economic openness across various levels of GDP for 166 countries and economies with available data, and for economic openness of Pakistan, it says it is less open than India and Bangladesh. It is only more open than Ethiopia, Brazil and Sudan.

The ADB says Pakistan is a relatively large country, however its trade openness remains remarkably low. Citing example, it says countries that have GDPs comparable to that of Pakistan but with much higher trade-to-GDP include the Philippines, the Netherlands, and Viet Nam. India’s GDP is almost 10 times larger than Pakistan’s, yet trade plays a greater role in its economy, according to the report.

Pakistan has historically experienced uneven growth and remains among the least open economies in the world, even after taking its relatively large size into account.

What it does export is dominated by textile products and rice, though a formal measure of concentration suggests that its exports basket is on the whole quite diversified.

The dominance of textile products in Pakistan’s exports raises the issue of diversification — or potentially the lack of it. Concentrating too much on only a few sectors or products poses risks to an economy since shocks to the dominant sector can more easily cause an economy-wide recession.

Pakistan can adopt to boost its growth to further open its economy to trade. Benefits to economic openness include opportunities for specialisation, access to wider markets, and the inflow of investments, technology, and know-how. There is also evidence that trade promotes the reallocation of labour from the informal to the formal sector.

Riaz Haq said...

Pakistan creating #export miracles under #imrankhanPTI. #Pakistan`s monthly exports soared by 51.23% in Feb 2022 compared to February 2021. Pakistan`s #exports witnessed an increase of 32.77% during the first 8 months of the current fiscal year from the same period last year.
http://en.ce.cn/Insight/202203/19/t20220319_37417208.shtml


Editor's note: Cheng Xizhong, Visiting Professor at Southwest University of Political Science and Law,Special Commentator of China Economic Net, former Defense Attache in South Asian countries. The article reflects the author's opinions and not necessarily the views of Gwadar Pro.

Pakistani Prime Minister Imran Khan's series of policies to encourage exports are now producing great achievements. Over the past year, despite the severe pandemic and the downturn of the world economy, Pakistan's exports of various commodities and services have increased significantly, which reflects the wise and correct decision-making of the Imran Khan administration.

According to the latest report of the Pakistan Bureau of Statistics (PBS), Pakistan`s exports witnessed an increase of 32.77% during the first eight months of the current fiscal year as compared to the corresponding period of the last fiscal year.

Among various export commodities and services, textile exports rose sharply by 26.08% during the first eight months of the current fiscal year as compared to the corresponding period of the last fiscal year. The exports of information technology (IT) services shot up by 32.63% during the first seven months of the current fiscal year as compared to the corresponding period of the last fiscal year, earning $1,486.89 million.

It was another miracle that last month, Pakistan`s exports soared by 51.23% as compared to February 2021.

In my point of view, in addition to the export stimulus policies, these amazing achievements are closely related to the Imran Khan administration's correct macroscopic equilibrium between pandemic prevention and control and economic development, export-oriented industry development, and continuous successful expansion of China-Pakistan Economic Corridor (CPEC) and Special Economic Zones (SEZs).

I have noted that in terms of specific measures, the Pakistani government has launched drastic reforms with the Asaan Karobar Programme as a historic and nationwide reform drive to improve the ease of doing business in Pakistan. In recent years, three rounds of reforms have been successively introduced. Around 167 reform measures have been taken up with federal and provincial departments, of which 115 reform measures have already been implemented involving 75 departments, benefitting more than 30 business sectors.

In order to constantly improve the business environment for expanding imports, the Pakistani Ministry of Commerce launched an online portal aimed at identifying and then removing regulatory obstacles and problems through active involvement of private sectors and business associations. The State Bank of Pakistan, Securities and Exchange Commission of Pakistan, and Federal Board of Revenue all coordinated their efforts in ensuring a business-friendly environment in the country.

I believe that the sustained and substantial increase in exports will enhance Pakistan's financial capacity for further promoting industrialization and modernization and improving people's livelihood.

Riaz Haq said...

Arab News Pakistan
@arabnewspk
#OPINION: Over the last three years, #Pakistan’s savings rate has improved from a low of 5.4 percent to 19.9 percent since 2020-- all helped by a robust growth in remittances and a deepening financial system, writes
@javedhassan

https://www.arabnews.pk/node/2049801


Riaz Haq
@haqsmusings
·
57m
Nearly 4X increase in #Pakistan’s #savings rate in past 3 years is very welcome news for the country’s #economic growth! Savings are extremely important for increased #investment to spur #gdp growth in any country, including Pakistan.

https://twitter.com/haqsmusings/status/1507052389856993308?s=20&t=wWRuDGR6yXBru9bI3xY7Aw

Over the last two decades, Pakistan has not only experienced a chronically low gross domestic savings rate but has also seen the savings rate decline until recently. According to data from the World Bank, the gross domestic saving rates fell from 16.4 percent in 2000 to just 5.4 percent in 2019. Pakistan’s savings rate compares unfavorably with East Asian countries and South Asian peers. Bangladesh and India have seen their savings rates increase over the same period, which in 2019 stood at 25 percent and 28.2 percent respectively.

Several studies show the relationship between the savings rate and economic growth, especially in developing countries. Economist Robert Solow first argued that larger savings result in higher investments and increased production (Quarterly Journal of Economics, 1956). Other economists such as McKinnon (Money and capital in economic development, 1973) and Shaw (Financial deepening in economic development, 1973) further emphasized the causative relationship between savings and economic development. Empirical evidence shows that as income increases with higher economic growth, it tends to also boost capital accumulation. Such favorable conditions help create a virtuous cycle of further investment and accelerating economic growth.
However, it is not always easy to identify the determinants of a society’s savings propensity. The collective spending behavior of households and public and private entities is subject to several interdependent social and economic factors. Literature suggests that a major factor of savings rates is the level of financial deepening in a society, that is, inter alia, the percentage of the population holding bank accounts, the development of financial markets and the diversity in financial instruments available.

Other factors influencing the savings propensity include culture, religion, and demographic factors such as the labour force participation rate and dependency ratio. Pakistan’s high fertility rate and burgeoning dependent youth population does not encourage household savings. The interplay of disparate factors is not always obvious, and yet often converge to affect the direction of the national savings rate. There is a consensus that people with high levels of income have a greater propensity to save and vice versa. However, for this to be sustainable, the growth should be through productivity gains and not consumption driven that is fuelled by external borrowings. If higher incomes do not result in investments in productive capacity, then the long-term savings rate is unlikely to improve and may even decline.

That has been the case with Pakistan where the economy expanded despite relatively low and declining domestic savings rates between 2000 and 2019. Such a growth model was unsustainable because the savings-investment gap was filled by foreign funding, primarily in the form of borrowings. More perversely, the economic growth was largely consumption-driven and masked the structural issue of low savings rate. It has led the country closer than ever to a foreign debt trap where the bulk of new external funding is not deployed in productive capacity but rather to service old foreign debts.

Riaz Haq said...

Samiullah Tariq
@samigodil
We should remember that the inflation and the PKR depreciation we are witnessing today is due to stagnant to declining exports during past decade. This has changed now. But the huge imbalance which was created over the decade would take some time to fade away

https://twitter.com/samigodil/status/1506854609783980033?s=20&t=wWRuDGR6yXBru9bI3xY7Aw

-----------------


Riaz Haq
@haqsmusings
#Pakistan's #exports grew 26.2% in first 8 months (July 21-Feb 22) of current fiscal year! #ImranKhan #PTI #economy

https://twitter.com/haqsmusings/status/1507009529845747723?s=20&t=wWRuDGR6yXBru9bI3xY7Aw

Riaz Haq said...

#German Deutsche Bank: “Pakistan will be in good shape” longer term, partly on rising exports, and that many multinational firms are bullish on the country and a few rank Pakistan among their top five destinations" #Pakistan #economy #imrankhanPTI #FDI https://www.bloomberg.com/news/articles/2022-03-24/deutsche-bank-says-trade-balance-to-pressure-pakistan-rupee

Pakistan’s currency could be weakened as the surge in energy and commodities prices deepens the nation’s current account deficit, according to Deutsche Bank AG’s country head, referring to the broadest measure of trade.

“That’s a key concern for the economy and for the business community,” the bank’s chief country officer, Syed Kamran Zaidi, said in an interview. “That is obviously something which the banks are also cautious about.”

The South Asian nation, which imports most of its fuel needs, saw its energy bill rise to $13 billion in the first eight months of the year that started in July, more than double the same period of the last fiscal, according to government data. Costs could increase further as oil prices have since surged above $100 a barrel amid supply concerns following Russia’s invasion of Ukraine.

A weaker rupee may be among the factors that pressure the central bank to raise borrowing costs, he added, estimating the benchmark target rate to increase between 50 and 100 basis points in the next few meetings, after being left unchanged for the previous two.


“The market has already incorporated this change as can be seen by secondary market yields of Treasury Bills and Pakistan Investment Bonds” that reflect short- and long-tenor instruments, said Zaidi.

Pakistan’s short-term bond yields have increased by at least 150 basis points in the past month, according to central bank data. Meanwhile, Pakistan’s rupee slipped for a seventh day to a record low 181.73 per dollar on Tuesday. Zaidi declined to share a forecast for the rupee.

The current account last month was a $545 million deficit, narrower than the $2.5 billion record shortfall in January, but still more than 16-times larger than the same month last year, according to central bank data.

The Frankfurt-based firm, which has been in Pakistan for 60 years, has described itself as one of the largest custodian businesses in the country and facilitates more than 40% of onshore institutional investment flows. It only offers corporate and not consumer banking in Pakistan. It has also launched a new foreign exchange trading platform for corporate clients in Pakistan.

Zaidi added that “Pakistan will be in good shape” longer term, partly on rising exports, and that many multinational firms are bullish on the country and a few rank Pakistan among their top five destinations. At least two of those companies are planning new factories in Pakistan, he said, declining to provide details as the information is private.

Riaz Haq said...

All Pakistan Textile Mills Association
@APTMAofficial
·
1h
Last entire year exports remained at $15.4Bn - now have reached $16Bn in 10MFY22, highest in comparison with past records. Whereas, sector still has 2 more months to perform till completion of FY22. With present momentum, InSha'Allah we can achieve our target of $20Bn this year.


https://twitter.com/APTMAofficial/status/1523657222395289600?s=20&t=6rTiyW9ZU8LVQb2TvTAD2Q

Riaz Haq said...

Pakistan LSM (large scale manufacturing) sector grows 10.4% in Jul 2021-Mar 2022


https://tribune.com.pk/story/2356514/lsm-sector-grows-104-in-jul-mar


The economic advisory wing of the finance ministry (now under PMLN), which till March (under PTI) had been predicting around 5% overall growth rate, has suddenly cut the forecast to 4% in its latest publication.

Contrary to that, the Planning Commission expects the growth rate in the range of 5% to 5.4%, which will be higher than the last PTI government’s target for the current fiscal year.

-----------------------

Big industries grew 10.4% during the first nine months of current fiscal year on the back of a low base effect and better output in sugar and apparel sectors, increasing prospects of achieving around 5% overall economic growth in this fiscal year.

Large-scale manufacturing (LSM) industries recorded 10.4% growth during July-March of the ongoing fiscal year over the same period a year ago, the Pakistan Bureau of Statistics (PBS) reported on Friday.

PBS data suggested that the increase largely came from the food sector, which has over one-tenth weight in the LSM index and apparel wear, which has 6.1% weight.

The other factor that contributed to the healthy momentum was the low base, as the index was at 126 in March last year, which jumped to nearly 154 this year.

The past year’s trend suggests that the LSM will post higher growth in April and May as well due to the low base effect.

The 10.4% growth during the first nine months of current fiscal year has strengthened the chances of achieving around 5% gross domestic product (GDP) growth in this fiscal year ending in June.

The increase in sugarcane and sugar production will offset the 1.5 million tons’ decline in wheat production.

The economic advisory wing of the finance ministry, which till March had been predicting around 5% overall growth rate, has suddenly cut the forecast to 4% in its latest publication.

Contrary to that, the Planning Commission expects the growth rate in the range of 5% to 5.4%, which will be higher than the last PTI government’s target for the current fiscal year.

The National Accounts Committee – the body that works out the growth estimates on the basis of input from the provincial and federal government departments – will meet by the mid of next week to approve the provisional growth rate for fiscal year 2021-22.

The new government has decided to revive the stalled International Monetary Fund (IMF) programme, which may also result in fiscal and monetary tightening to bring economic stability. This could hurt growth prospects for fiscal year 2022-23.

The previous government had targeted 4.8% economic growth for the current fiscal year. The IMF and other financial institutions have projected Pakistan’s economic growth in the range of 4% to 4.3%, which is a decent rate but nearly half of what is required to create jobs for all new entrants in the market.

The central bank has injected hundreds of billions of rupees into the economy, which provided a fresh impetus to the economic growth but fueled inflation in the country.

The LSM data is collected from three different sources. Data collected by the Oil Companies Advisory Council (OCAC) showed that the output of 36 items increased on an average by 2% in the first nine months of current fiscal year.

The Ministry of Industries, which monitors 11 products, reported a 10.3% increase in output during the July-March period. Provincial Bureaus of Statistics reported 12.1% growth in the output of 76 goods, stated the PBS.

On a yearly basis, the LSM sector showed 26.6% growth in March over the same month of last year. However, half of the increase in March output was because of increased production of sugar by the mills.

The industries that posted growth in the first nine months of current fiscal year included textile, which registered 3.2% growth.

The textile industry is the largest sector in the LSM index, having 18.2% weight. The production of apparel wear increased 34% during the first nine months of FY22.

Riaz Haq said...

APTMA Chairman dubs PTI’s ousting as cruel - Global Village Space

https://www.globalvillagespace.com/aptma-chairman-dubs-ptis-ousting-as-cruel/

Separately he (Hamid Zaman) added that the policies introduced by financial institutions during the tenure of the PTI-led government provided a very enabling environment for the businesses. It is pertinent to mention that last year $5 billion of expansion was made in the textile sector.

---------------

Textile Machinery Imports in Pakistan in 2021 – The Textile Think Tank

https://thetextilethinktank.org/textile-machinery-imports-in-pakistan-in-2021/

Textile Machinery Imports in Pakistan in 2021
Dr. Tanveer Hussain January 21, 2022
Textile machinery imports in Pakistan increased from around US$435 Million in 2020 to US$792 Million in 2021. This reflects around 82% increase from the previous year. This indicates capacity expansion as well as technology upgradation in the Pakistan Textile Industry.

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Top 10 Denim Fabric Exporters in the World in 2019 – The Textile Think Tank

https://thetextilethinktank.org/top-10-denim-fabric-exporters-in-the-world-in-2019/

Top 10 denim fabric exporters in the world are: China, Pakistan, India, Turkey, Hong Kong, USA, Italy, Egypt, Japan and Mexico. Pakistan in the second largest exporter of denim fabrics in the world, followed by China. Pakistan’s denim fabric exports were worth US$587 million in 2019. Pakistan could have earned three times more

Riaz Haq said...

Pakistan posts highest monthly textile exports of $1.74bn in April


https://mettisglobal.news/pakistan-posts-highest-monthly-textile-exports-of-1-74bn-in-april/



May 16, 2022 (MLN): The country has witnessed the highest ever monthly exports of $1.739 bn during April 2022, up by 31% YoY and 7% MoM, the latest data released by the Pakistan Bureau of Statistics (PBS) showed.

During the ten months (July-April) of the current fiscal year, textile exports posted a growth of 26% YoY to $15.98bn when compared to $12.69 recorded in 10MFY21.

The year-on-year increase in exports is due to strong demand in the West before the summer season, while other factors include the resumption of economic activity, which has led to a shortage of various retail brands, competitive utilities and borrowing rates.  

In the value-added segment, knitwear, readymade garments, bed-wear, and towels registered an upsurge of 44%, 44%, 16%, and 28%, YoY to $488mn, $351mn, $279mn and $108mn during April 2022 compared to the same month last year.  

Meanwhile, the country exported food commodities worth $524mn during April 2022, registering a jump of 35.7% YoY or 2.2% MoM.

Commodity-wise, rice remained the primary source of foreign exchange earnings during the review period as its exports were valued at $259.6mn, up by 37% YoY. While the export of fish & fish preparations declined by 16.4% YoY to stand at $40mn.

The export value of meat and meat preparations clocked in at $35.6mn, up by 10.3% YoY.

In April 2022, the export of petroleum products posted a growth of 53.6% to $45.2mn. It was mainly led by exports of petroleum crude, standing at $38.5mn, depicting a growth of 81% YoY.

Going into details made available by PBS, the other manufactures group observed a 23.8% YoY increase during the period to $366mn. Under this group, the trade value of sports goods stood at $36mn, up by 21.5% YoY.  The country earned $51.54mn through the export of leather manufactures, marking a growth of 26% YoY.

The exports of chemical and pharmaceutical products witnessed an increase of 42.7% to value at $153mn during April 2022. The major chunk of exports under the chemical and pharma group during the said period was mainly from the other chemicals and plastic materials which clocked in at $92.7mn and $35.4mn, showing significant growth of 35.6% YoY and 83% YoY.

“Textile exports growth is likely to remain strong in the upcoming months due to continued rerouting of orders out of China. Also, the surge in freight charges on shipments of unfinished products to competitors like Bangladesh is likely to fare well for Pakistan, as various brands have started routing orders to Pakistani exporters in order to arrest thinning margins,” Abdul Ghani Mianoor at Intermarket Securities said.

According to channel checks, demand for value-added products is likely to remain intact, as orders have been booked for at least the next 3mths, while procurement of cotton at lower than prevailing rates is likely to result in sustained strong margins for the remainder of FY22. However, the ongoing Russia-Ukraine issue has led to a surge in global inflation, which if prolonged, may potentially lead to a moderate slowdown in export growth, he added.

Riaz Haq said...

ESSENTIAL SOURCING GUIDE: The Pakistan apparel sector
Just Style takes an in-depth look at the Pakistan apparel sector which has witnessed many advances and retreats during the last decade.

https://www.investmentmonitor.ai/uncategorized/essential-sourcing-guide-the-pakistan-apparel-sector

According to Rahim Nasir, chairman of the All Pakistan Textile Mills Association (APTMA), textile and clothing exports grew 23% in 2020-21 year-on-year by earning US$15.4bn, up from $12.5bn in 2019-21. He noted that 70% of these exports were of products where significant processing had been undertaken to produce value-added products, a healthy sign.


Hamid Zaman, the APTMA’s Northern Zone chairman, stressed that Pakistan exports of higher value bedsheets, knitwear and woven garments had increased while lower value yarn exports shrank.

Syed Emad Raza, chairman of the Manufacturers & Exporters Ferozpur Road Association, Lahore, (a manufacturing hub) stressed that international buyers had been alarmed at rising Covid cases in Bangladesh and India: “This panic buying by the international buyers benefited us and they shifted orders from India and Bangladesh to Pakistan.”

There has also been more optimism within the sector under the recently dismissed government of former Prime Minister Imran Khan, led by his Pakistan Tehreek-e-Insaf (PTI) party, that came to power in 2018, which had increased assistance to the sector and had written a detailed Textiles & Apparel Policy, which officially covers 2020-25.

Imran has now been replaced by an opposition alliance led by new Prime Minister Shehbaz Sharif, head of the Pakistan Muslim League (Nawaz), working with its former opponent, the Pakistan People’s Party, which assumed power after a no confidence motion toppled Imran on 10 April. The textile plan should survive, and the vice president of Lahore Chamber of Commerce Haris Ateeq says that political uncertainty is now declining, with the new government likely to remain in place until scheduled elections next July (2023).

The new government will need to work hard to retain support from the Pakistan apparel sector. Zaman argued that the Imran government had helped the industry grow, and was still expanding sales overseas – he hoped exports of clothing and textiles would yield revenues of $21bn by end of the 2021-2 fiscal year, in June.

Increased investments for Pakistan’s apparel sector
Clothing and textile executives told Just Style they were also hopeful of increases in investment as well as exports (comprising just 1.6% of the global textile and clothing trade, according to the APTMA. In February (2022) the government approved the much-awaited Textiles & Apparel Policy, which was approved officially by the Imran-led cabinet.

Its key proposals include a goal of increasing the country’s textile and clothing exports to $25.3bn by 2025 and then $50bn by 2030. This would see Pakistan raise its global share of textile and clothing exports to 3%. As well as limiting energy prices, the plan includes proposals to increase the country’s cotton production to 20 million bales in the next five years, reducing input costs and preserving foreign currency reserves. The plan also commits the government to increasing artificial fibre production at competitive prices by rationalising customs duties and other taxes.

The policy also commits the government to help the textile industry deal with Covid’s disruption of the supply chain. It also aims at attracting domestic and foreign investment in textile value chains and uplift to value-added sectors with special focus on SME sector.

Assuming the clothing and textile plan survives, Abdul Razak Dawood, the ex-PM’s apparel and textile industry advisor, told a press conference before Imran’s fall that its key commitment was to “give the textile industry in writing [a commitment] to ensure that internationally and regionally competitive gas and power rates throughout the policy period”.

Riaz Haq said...

ESSENTIAL SOURCING GUIDE: The Pakistan apparel sector
Just Style takes an in-depth look at the Pakistan apparel sector which has witnessed many advances and retreats during the last decade.

https://www.investmentmonitor.ai/uncategorized/essential-sourcing-guide-the-pakistan-apparel-sector

Sadly, for an industry that has often complained about high Pakistan energy costs, that commitment does not now include a formal price ceiling. The original plan, said Dawood, promised to freeze existing tariffs until 2025 – for gas at $6.50 equivalent per million BTU – British Thermal Units – and electricity at 0.09 US cents equivalent per unit (kWh – kilowatt hour). But given rising energy prices (which have since skyrocketed because of Russia’s invasion of Ukraine), and limited Pakistan budget resources, the pledge was downgraded to offering international competitiveness. Dawood said that the finance, commerce and energy ministries would determine these competitive rates annually during government budget negotiations.

Despite this set-back, Rahim said industry intelligence anticipated that $5bn new investment was in the pipeline, with 100 new production textile units are likely to open soon.

Emad noted that these investments would be focused on Lahore and Karachi, although Masood Textile and Interloop (a socks and hosiery specialist), both based in Faisalabad plan to install new denim units. Some non-textile companies are eyeing investments in the sector too: Orient Electronics – a leading electronics manufacturing company – is planning to establish a garment unit in Lahore, said Emad, who is also CEO of W.E Apparel Ltd, Lahore.

He noted major Pakistan manufacturers and exporters were also increasing investment in sustainability, reducing their environmental impact, which can boost overseas sales to consumers concerned about buying greener products. “Take the example of my own company where we have installed a water treatment plant with a cost of $0.83m [Pakistani rupees PKR150 million],” he added.

Apparel remains dominant exporting segment for Pakistan
If this capacity expansion is delivered, it would indicate that Pakistan is looking to punch its weight in global clothing and textile markets. According to a report from Asian Development Bank (ADB), released in January (2022), Pakistan – a country of 220 million people – has one of the lowest trade-to-GDP ratios in the world, at just 30%, with clothing and textiles being the dominant exporting segment.

The report stressed how “existing patterns” orient this trade towards the US, Europe and China, and the country “specialises in textiles”. One problem is that Pakistan does not have a significant trading relationship with its neighbours in south Asia, said the ADB report ‘Pakistan’s Economy and Trade in the Age of Global Value Chains’.

According to the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), Pakistan’s major clothing and textile exports markets comprise the US 28%; the UK 11%; Germany 7%; the Netherlands 7%; China and Spain 5% each; Italy and Afghanistan 4% each; Bangladesh and Belgium 3% each; and France 2%.

Also, Pakistan textile and clothing exports are less diversified than in next door India, the ADB report said. The APTMA’s Razak agreed that Pakistan’s textile sector lacked diversification in terms of product range and market targets and was exporting 75% of products to just 10 countries. By increasing both its product numbers and markets, the sector could improve its value-addition, he said. According to Razak, the 2020-5 textile and apparel policy does address these issues.

According to Rahim, keeping energy costs down works, highlighting how when in 2019 the Pakistan government reduced the electricity and gas rates paid by the textile and clothing industry, this attracted new investment in the textile sector: “We have witnessed over 20% growth during this period,” he told Just Style.

Riaz Haq said...

ESSENTIAL SOURCING GUIDE: The Pakistan apparel sector
Just Style takes an in-depth look at the Pakistan apparel sector which has witnessed many advances and retreats during the last decade.

https://www.investmentmonitor.ai/uncategorized/essential-sourcing-guide-the-pakistan-apparel-sector


Zaman is concerned about this cotton production weakness: “In the past three years, the industry had to import due to short production,” with an average of three million cotton bales being imported annually, he noted.

To deal with such shortages the government needs to strengthen research and development in cotton to develop high-yielding, pest-resistant cotton, said Hamid.

Getting more predictability in domestic cotton production would allow Pakistan to play to its strengths. It is the fifth largest producer of cotton and has the third largest spinning capacity in Asia after China and India – contributing 5% to global capacity, according to the APTMA.

According to a Pakistan Board of Investment & Trade (PBIT) report released in 2018, cotton is the real strength of Pakistan’s textile and clothing sector – especially when competing with its south Asian competitors, who lack this key backward linkage. Its popularity as a yarn in Pakistan’s domestic market helps build capacity to better tap export demand. And having a strong fibre sector enables Pakistan to maximise value addition, unlike competitors who cut and sew imported fabric.

Spinning remains the ‘backbone’ of the textile and clothing industry
The PBIT stressed that the country’s spinning sector (output yarn) is the backbone of its textile and clothing industry. At present, the sector comprises 523 textile units, with 40 composite units accounting for 13.269 million spindles and 185,000 rotors and 483 spinning units running 11.083 million spindles and 140,000 rotors, it said. Capacity utilisation is tight, being at 84% for composite textile units and 76% for spinning units during July-March 2017-18, it said. These plants are concentrated geographically, with more than 65% of textile units in Punjab, the largest province, and 25% in Sindh province, 5% in Khyber Pakhtunkhwa, and the rest in Balochistan and Azad Kashmir.

To leverage this strength, more investment in modern equipment is needed, said the report, which highlighted ongoing problems regarding a shortage of quality yarn. This compounds problems in the next phase of the production chain, where the power loom sector suffers from poor technology. It noted that there were 9,084 installed looms in Pakistan cotton textile mills by 2018, with a lower level of utilisation at that time – 6,384, according to the report.

Updated statistics provided by APTMA reveal there are 517 spinning units with 13.4 million installed spindles in Pakistan; 375,000 looms; 400 finishing units – organised and unorganised; 10,000 towelling units; 1,200 knitting units, with 50,000 machines; and 5,000 stitching units, (comprising 200,000 industrial and 450,000 domestic machines).

More investment in modern production equipment might help Pakistan shift away from a reliance on cheaper and low value-added products in exports, which, according to the PBIT make up more than 50% of the value if the country’s exports, by value. Cotton cloth, cotton yarn, bed sheets and lower-end knitwear remain major export generators, it says (the APTMA claims it is 60%.

Despite its difficulties, Pakistan does have strong and innovative manufacturers, notably those developing their own apparel brands have emerged. Some of this has been based on advances in the Pakistan production of fine weave lawn cloth. And Pakistan consumers are becoming more brand conscious, being happy to seek out and wear local labels. Apparel brands, such as Khaadi (of Karachi); Sapphire (Lahore) and Sana Safinaz (Karachi), have focused on value addition and with Pakistan consumers prepared to pay for local quality, high profits have followed, including by developing exports.

Riaz Haq said...

ESSENTIAL SOURCING GUIDE: The Pakistan apparel sector
Just Style takes an in-depth look at the Pakistan apparel sector which has witnessed many advances and retreats during the last decade.

https://www.investmentmonitor.ai/uncategorized/essential-sourcing-guide-the-pakistan-apparel-sector



Despite its difficulties, Pakistan does have strong and innovative manufacturers, notably those developing their own apparel brands have emerged. Some of this has been based on advances in the Pakistan production of fine weave lawn cloth. And Pakistan consumers are becoming more brand conscious, being happy to seek out and wear local labels. Apparel brands, such as Khaadi (of Karachi); Sapphire (Lahore) and Sana Safinaz (Karachi), have focused on value addition and with Pakistan consumers prepared to pay for local quality, high profits have followed, including by developing exports.

Khaadi is a case in point. This luxury fashion house started international sales as long ago as 2010 in the United Arab Emirates (UAE), and now sells into Saudi Arabia, Australia, the US, Mexico, Malaysia, Canada and the UK. Another successful Pakistan-based company has been J. Junaid Jamshed Pakistan, which has successfully opened stores in Europe and the GCC (Gulf Co-operation Council) region.

The Ferozpur Road Association’s Emad said the developing of local brands was strengthening the overall profile of Pakistan’s textile industry.

These branded companies have benefited from a growth in e-commerce sales within Pakistan, which is generating major revenues for online retailers. With an annual revenue of $50m Lahore-based Limelight.pk was the biggest store in 2021, followed by Karachi-based Gul Ahmed $48m and Khaadi $29m revenue).

The challenges facing Pakistan’s apparel sector
Looking ahead, aside from the political uncertainties, the Pakistan clothing and textile sector may have to deal with other external surprises. One concern highlighted by Emad was that Pakistan’s 2023 GSP+ (Generalised Scheme of Preferences) status for privileged trade access to the European Union (EU) may expire in 2023. If this happens, it could spark a 12% increase in exporters’ costs through additional duties, he said. There is also concern about a potential blacklisting of Pakistan by global anti-money laundering organisation the Financial Action Task Force (FATF) over alleged weaknesses in the country’s control of dirty money. The country is already on FATF’s grey list – a blacklisting would mean international banks will have to impose special checks on transactions to and from Pakistan and extensive de-risking by financial institutions could hinder financial flows: “If we go from grey to black list, we will be in great trouble,” said Emad.

As well as addressing this “sword of Damocles”, said Emad, the government could help the industry prosper by withdrawing customs duties and taxes on import of certain important raw materials, including finishing chemicals, zips and specialist yarns.

Raza Baqir, executive director of APTMA, said the government should continue to support the overall economy, which has struggled with the Covid pandemic – shrinking 0.9% in 2020, according to the World Bank. The State Bank of Pakistan financed $2.39bn (PKR435bn) under the relief fund for all manufacturers, including the textile sector, during Covid, although this programme expired in 2021.

Riaz Haq said...

ESSENTIAL SOURCING GUIDE: The Pakistan apparel sector
Just Style takes an in-depth look at the Pakistan apparel sector which has witnessed many advances and retreats during the last decade.

https://www.investmentmonitor.ai/uncategorized/essential-sourcing-guide-the-pakistan-apparel-sector


If Pakistan can stabilise its economy and politics, its clothing and textile sector can grow sustainably, said Raza. With a strategic location, closer to Europe than east Asia, deep seaports and solid air transport services, Pakistan is also close to the major emerging textile and clothing markets of China and India, said the APTMA executive director. With a 220 million population, an increasingly large and prosperous middle class, and 35.7% of the population aged 15 years or younger, Pakistan will support a growing domestic fashion industry that can serve as a basis for major export sales, he predicted.

Riaz Haq said...

IFC will invest the equivalent of $25 million in Pakistani rupees for a minority stake in Khaadi Corporation, which has 57 retail outlets spread across Pakistan and presence in UK and GCC countries.

https://mettisglobal.news/ifc-to-invest-around-25mn-in-khaadi/

May 27, 2022: International Finance Corporation (IFC) is all set to invest around $25 million in Pakistan’s top fashion retailer Khaadi Corporation to create jobs, promote gender equality, and support the country’s crucial textiles sector post-pandemic, said a press release issued on Friday.

Khaadi has 57 retail outlets spread across Pakistan and a presence in the UK and GCC countries. The funding will help the company accelerate its growth by expanding its retail footprint and online global sales. It will also indirectly support the retailer’s suppliers in Pakistan, many of whom are smaller businesses.

We are excited to begin the next chapter of our growth transformation with IFC’s first investment in the Pakistan fashion retail sector. We envisage this investment will help us set new benchmarks in organizing the retail sector in Pakistan and beyond, through strategic initiatives to drive growth, corporate governance, and diversity,” said Shamoon Sultan, founder, and CEO of Khaadi Corporation.

IFC’s investment is designed to support the development of Pakistan’s retail and textiles sectors, which provide 40 percent of employment and account for about 9 percent of the country’s gross domestic product. About 30 percent of those who work in the textiles sector are women and supporting the industry will help promote gender equality in Pakistan.

The textiles and retail industry is a core part of Pakistan’s economy and a major employer of women, especially in the garment sector,” said Zeeshan Sheikh, IFC Country Manager for Pakistan and Afghanistan. “By channeling financing and advisory support into the industry and partnering with innovative companies like Khaadi we can help the sector grow, formalize, become more sustainable, and create greater economic employment opportunities for women.”

Along with the investment, IFC will advise Khaadi Corporation on enhancing its corporate governance structures, sustainability, and gender diversification programs.

Riaz Haq said...

Our Favorite Top Retail Fashion Brands In Pakistan
By
Kainaat Maqbool
December 9, 2020


https://dnd.com.pk/our-favorite-top-retail-fashion-brands-in-pakistan/206915

Sapphire.
Khaadi.
Gul Ahmed.
J. by Junaid Jamshed.
Sana Safinaz.
Outfitters.
Limelight.
Bonanza – Satrangi.

Riaz Haq said...

According to Marketplace Pulse research, Pakistan is currently the No. 3 top country among new sellers that joined Amazon’s marketplace in the U.S. in 2022.

https://www.marketplacepulse.com/articles/pakistan-sellers-are-getting-into-amazon


Unsurprisingly, the U.S. and China top the list. The thousands of Pakistani sellers dwarf in comparison to the two largest locations, but that’s more than the rest of the countries in the world, including export hubs like India and neighboring countries like Canada.

Rank Seller Country
1 United States
2 China
3 Pakistan
4 United Kingdom
5 Turkey
6 Canada
7 Vietnam
8 India
9 Brazil
10 Japan
A lot more sellers are coming. Pakistan is home to the world’s largest Amazon seller groups: “eCommerce by Enablers” with over 1.2 million members, “Extreme Commerce by Sunny Ali” has more than 1.1 million members, and “Ecommerce Success Pakistan” has nearly 200,000. The groups started years before Pakistani sellers were officially allowed to sell on Amazon.

Riaz Haq said...

Textile exports were recorded at $19.35 billion in the outgoing FY22, showing an upsurge of 26% YoY when compared to $15.41bn in FY21, according to the data issued by All Pakistan Textile Mills Association (APTMA) today.

The year-on-year increase in exports remained strong due to the resumption of economic activities, and strong demand in the West while rerouting orders out of China and regional countries.

In the month of June 2022 alone, textile exports just inched up by 4% YoY to $1.73bn as compared to $1.66bn in June 2021.

https://mettisglobal.news/textile-exports-crosses-19bn-mark-in-fy22/

--------

Ali khizar
@AliKhizar
Proof is in the pudding !

https://twitter.com/AliKhizar/status/1543929658739023872?s=20&t=14tEYcK_3KZMtqZG5GrKGw

Riaz Haq said...

Arif Habib Limited
@ArifHabibLtd
Highest ever oil import bill during FY22 amid a 71% YoY jump in Arab Light prices along with 19% YoY volumetric growth.

https://twitter.com/ArifHabibLtd/status/1549436102188081153?s=20&t=T9F58BD1swNPae5vu_mvxA

---------------

Arif Habib Limited
@ArifHabibLtd
Balance of Trade FY22

Historic high trade deficit during FY22, up by 56% YoY

Exports: $ 31.79bn; +26% YoY
Imports: $ 80.18bn; +42% YoY
Trade Deficit: $ 48.38bn; +56% YoY

https://twitter.com/ArifHabibLtd/status/1549433873347579904?s=20&t=b20BZelKhp8oumsNy7N5og

-----------------


Arif Habib Limited
@ArifHabibLtd
Historic high textile exports during FY22, increased by 26% YoY to USD 19.33bn

https://twitter.com/ArifHabibLtd/status/1549430609520508931?s=20&t=q2pwBz7Am1ZetYwiNYbfCA

Riaz Haq said...

Shahid Ali Habib
@ShahidAliHabib1
Highest ever revenue and highest ever profit by
@InterloopLtd
, largest textile manufacturer of #Pakistan. 100% increase in profits and over +60% in revenues (exports).
Thank you so much
@MusadaqZ
and
@navidcch
, Maqsood Sb and entire Interloop team. #PSX is delighted to have you

https://twitter.com/ShahidAliHabib1/status/1570451775047565315?s=20&t=AppHMR7MBgTVyB8Am8ZM3Q

Riaz Haq said...

Arif Habib Limited
@ArifHabibLtd
Textile exports increased by 8% YoY to USD 1.6bn during Aug’22
Aug’22: $ 1.58bn, +8% YoY, +6% MoM
2MFY23: $ 3.06bn, +4% YoY

@PBSofficialpak

@APTMAofficial

@StateBank_Pak

#PBS #Exports #Trade #Economy


https://twitter.com/ArifHabibLtd/status/1570331949239091200?s=20&t=pIaIgNbo5g6-sWn9F0eerQ

Riaz Haq said...

#Factories Making Towels & Bedsheets Are Shutting in #Pakistan. As many as 100 smaller #textile mills have suspended operations due to a shortage of good quality #cotton, high #fuel costs, & poor recovery of payments from buyers in flood-hit areas https://finance.yahoo.com/news/factories-making-towels-bedsheets-shutting-000000992.html?soc_src=social-sh&soc_trk=tw&tsrc=twtr

The mill closures underscore challenges for the sector that employs about 10 million people, accounts for 8% of the economy and adds more than half to the nation’s export earnings. Their hardships have become acute due to recent floods, which submerged a third of Pakistan, killed more than 1,600 people, and damaged about 35% of the cotton crop.

The latest blow comes at a difficult time for the South Asian nation that is already struggling with high inflation and falling currency reserves. The closure of firms, such as AN Textile Mills Ltd., Shams Textile Mills Ltd., J.A. Textile Mills Ltd. and Asim Textile Mills Ltd., could worsen the country’s employment situation and hit its export earnings. Larger companies are also facing rough weather, with demand for their products seen falling about 10% by December from now due to a slowdown in Europe and the US, Mukhtar said.

Due to an “unforeseen downturn in the market and unavailability of good quality cotton” following heavy rains and floods, the company’s mills have been temporarily closed, Faisalabad-based AN Textile said in an exchange filing earlier this month.

Cotton production in Pakistan could slump to 6.5 million bales (of 170 kilograms each) in the year that started in July, compared with a target of 11 million, Mukhtar said. That could force the nation to spend about $3 billion to import cotton from countries such as Brazil, Turkey, the US, East and West Africa and Afghanistan, said Gohar Ejaz, patron-in-chief of All Pakistan Textile Mills Association. About 30% of Pakistan’s textile production capacity for exports has been hampered because of cotton and energy shortages, Ejaz said.

Riaz Haq said...

Arif Habib Limited
@ArifHabibLtd
Monthly machinery imports declined to a 9 year low of USD 457mn during Oct’22
Oct’22: $ 0.46bn, -48% YoY, -3% MoM
4MFY23: $ 2.2bn, -40% YoY

https://twitter.com/ArifHabibLtd/status/1593263516810727424?s=20&t=xEVZ14IBivTc1zwg-KYi-A

Riaz Haq said...

Arif Habib Limited
@ArifHabibLtd
Textile exports decreased by 15% YoY to USD 1.4bn during Oct’22
Oct’22: $ 1.4bn, -15% YoY, -11% MoM
4MFY23: $ 5.9bn, -1% YoY

https://twitter.com/ArifHabibLtd/status/1593262890919895040?s=20&t=M0wZNDCCGBW7U0NQnEf2Fg

Riaz Haq said...

HOW ROADS CHANGED THARPARKAR


by Arif Hasan

https://www.dawn.com/news/1714144

The main recommendation of the 1987 report on drought and famine conditions in Thar, prepared by the author, was that the changes taking place in Thar could only be consolidated through increased mobility and linkages of Thar with the rest of Pakistan in general and Karachi and Hyderabad in particular.

It was felt that, if a road-building programme did not take place, the inequities in Thari society would increase, since those who could hire or possess four-wheel drives would be the main beneficiaries of Thar’s huge mineral and livestock potential.

For mobility and linkages to happen, a road-building programme had been recommended, which envisaged linking the four Thar taluka headquarters with one another and with the national road network. However, it was not till the Musharraf era (2000-08) that a road-building programme commenced.

The roads have made transportation cheaper and easier. The old six-wheeler kekra [World War II era American truck], which was slow and consumed enormous amounts of energy plying on the desert tracks, has been replaced by normal Bedford trucks, which are cheaper to run and can carry 250 maunds as opposed to 150 maunds carried by the kekras.

It is claimed by the transporters that, earlier, it used to take three hours from Mithi to Naukot, but now this has been reduced to one hour. They also claim that the cost of petrol/diesel and maintenance of vehicles have been reduced by 20 per cent.

With the building of the road network, trade and commerce has increased substantially. Thar’s agricultural produce now goes to distant markets — six to seven lorries per day carry onions from Nagarparkar to Lahore, and vegetables and fruit from other areas of Sindh and Punjab are now easily available in Thar.

Unlike the situation that prevailed 15 years ago, there are cattle markets in the taluka headquarters, so the Tharis do not have to make the long trek on foot to Juddo to sell their animals. Shops carrying industrially produced household food have multiplied and sell items such as baby diapers, something quite unimaginable before. Every hour an air-conditioned bus, complete with TV and Wi-Fi (owned mainly by Pakhtuns and people of Mianwali based in Karachi) leaves for or arrives in Mithi.

The number of taxis operating in Thar has increased from 150 to over 400, while the qingqis in Mithi have increased from over 150 to over 300 since 2013. These taxis carry passengers not only within Thar but to distant locations all over Pakistan, while the qingqis have almost completely replaced transport animals such as camels and bullocks.

Bank loans for the purchase of taxis are available, but to buy the qingqis and trucks, one can only borrow from the informal market. Interest rates against loans are high and vary depending on how much advance payment can be made by the borrower, or if property or land can be mortgaged against the loan. Spare parts and mechanics for the maintenance of the taxis and qingqis are locally available, which was not so in 2000 and, very often, the vehicles had to be taken to Umerkot for maintenance purposes.

Almost all these different types of vehicles have no insurance, since the owners find insurance rates far too expensive and prefer to put their trust in God. The qingqi and taxi owners have no association but are of the opinion that they desperately need one to negotiate with government agencies and fight against the bhatta [protection money] that the police extorts from them.

An association is also necessary to resist pressure from national transporters’ associations, who coerce the Thari transporters to call a strike on their advice. This was not an issue in the past, because the kekras, which the new vehicles replaced, were collectively owned by seths in Umerkot and Naukot. One truck driver pointed out that there was a desperate need for a driving school in Mithi, because people who were learning to drive were dangerous and caused a large number of animal deaths.