Textile industry in Pakistan

Abstract

: Importance of textile industry in pakistans economy can

never be neglected, this is the industry contributing more than 8.5 % to the
countrys GDP, with exporting share in economy of 60%, apart from all that the
industry being labour intensive plays a key role in jobs creation in Pakistan.
Statistics tell that Pakistan is the fourth largest cotton grower , and has the third
largest spinning capcity in Asia. However the country being endowed with different
unique blessings cannot make some difference upto the mark. Even the demand for
textile goods in the world increses at an average rate of 3% a year, but still the
exports of the Pakistani industry tend to be declining. Shortage of energy and
political instability play a vital role in the destruction of the industry. Even there is a
huge opportunity for Pakistan to export its finished textile products, still it operates
for raw goods, which poses a large threat for countrys future growth. Through this
short article we after analyzing the international market conditions in terms of
Pakistan , will check for the causes behind those things and finally we will be
coming up with some suggestions to tackle the problems.

Sectors previous performance : During the

last few years the sector has vitnessed different ups and downs and no consistency
have been seen, if properly seen the cotton prices of Pakistan increased from 83.4
us dollors per pound to 89.7 us dollors per pound from the fiscal year 2013 to the
fiscal year 2014 ( februray month statistics ) , this is mainly because of the
imbalances in inventory to consumption ratio that mainly importing countries had at
the time, however this short term increase in the prices can not depict the future
improvements , but the point to put here is that the performance of the sector
mainly depends on external factors rather than having any proper strategy of its
own.

Pakistan textile industry and the

demand pattern of other countries : As,
Pakistan is the exports oriented country in terms of textile goods, so its exports are
mainly defined by the demand pattern of the other countries as well, in this case
USA and the European countries are the major demand drivers, with china being the
leading player in industry, pakistans competition with major players in the area
that are Bangladesh, China and India is severe. Over the years the exports total
share of china in the world has increased with that of Pakistan being relatively
constant. Textile exports from Pakistan decreased by 10.7 % in fiscal year 2012 ,
whrere as the export of cotton yarn decreased by 18%.
Finished goods vs raw material exported : Pakistan despite having different
resources and truly capable to produce and export finished textile goods to other
countries, still is considered to be a source of semi finished raw material provider to
different nations who by using Pakistani raw yarn add value to these goods and sale

the same goods very expensive that they buy from Pakistan at very cheaper rates.
In this scenario it can also be said that Pakistan is serving other nations to earn
more on its products.

Problems faced by the industry :

Energy crisis : producing the goods in Pakistan seems to be relatively more

expensive because of energy shortages, that is why different foreign based
companies mainly avoid investing in Pakistan. and if some are already
operating most of them are shifting from Pakistan to Bangladesh because like
Pakistan , Bangladesh also has the same cheap labour but they have
relatively very low energy shortage.
Political instability : inconsistent government polecies and local political
intervention along with bad law and order situation also put a great question
mark on future of this sector.
Lack of research and development : according to experts Pakistani finished
textile goods tend to be of low quality as compared to that of the other
countries , and this is mainly because of poor and outdated machinery in the
sector, and the lack of consumer insights in the market . Pakistani products
still are of outdated fashion due to which most of the consumers avoid using
them.

Suggestions for improvement in

exports :

A lot of cotton fiber is exported to different countries , and it is a great loss of

the country to export raw material at very small price to other countries , so
some polecies should be designed to minimize the export of raw material.
A proper attention should be given to the consumer insights along with
proper investment on research and development which can truly guaranty
the future growth of this sector.
Producers , producing and exporting modern finished goods should be
encouraged.
Foreign producers in the country should be encouraged because they not
only can bring the technology with them, but also the market of Pakistani
finished goods can be boosted up.