If Pakistan's textile exports are to be increased then product diversification has to take place in tandem with evolving global consumer preferences. Yesterday, this column commented on the champion textile products identified by the Pakistan Business Council (PBC) report on the garment sector.
The report confirms the observations made in this space of the importance of manufacturing those products which are in demand in international markets. Failure to do so will only result in an obsolete export mix and declining exports.
But as the PBC report points out, Pakistan has certain “underachievers" which are products which have seen a growing global market share which Pakistani products have been unable to capitalize on. In fact, these are products which have witnessed a declining market share and should be a cause of worry for Pakistan export firms.
As shown in the above table, the authors have identified five such underachievers in the readymade garments and knitwear segments. These are products where competitor countries including Bangladesh, Vietnam and China have been quick to grab market share lost by Pakistan textile exporters.
For example in woven exports, the women's or girl's non-cotton trousers, breeches and shorts of textile material (HS 620469) are the fastest growing world market that Pakistan currently produces for. However, the report alarmingly points out that while global imports for rose by 9 percent on average in the past five years, Pakistan's world export share in HS 620469 has shrunk by 22 percent per annum and its world export share stands less than 1 percent currently.
A similar pattern exists in men's or boy's trousers, breeches and shorts of cotton (HS 620342) which had imports worth $26.2 billion in 2017 and is a major export category. Yet, Pakistani products have lost export share at average rate of 11 percent from 2013-17. This was at a time when Bangladesh managed to grow its exports by 4 percent on an annual basis.
Another case in example is men's or boy's trousers and shorts of textile materials (HS 620349) which saw world demand go up by 7 percent. Pakistan exports in this category remained stagnant at 8 percent of the world export share while India and Egypt dominated at 19.3 and 11.3 percent respectively.
The bottom line is that it is not just the government's failures which have put the textile industry in a tight fix. The private sector must deliver products of high quality fabric and top-notch finishing using the latest production techniques in order to salvage market share in these competitive product categories.
Lastly at the risk of being repetitive, Pakistan firms have to step out of their comfort zone and start producing synthetic knitted garments instead of an outdated focus on cotton products. The government should also provide rebates and incentives to only those products which have a scope in global markets. Otherwise production is not being directed towards the most lucrative export product mix.