Foreign sales of rice and wheat led to the surge in exports to Bangladesh, Afghanistan and China during the last fiscal year. - File photo

PAKISTAN’s exports have witnessed a rapid diversification in recent years with demand rising fast for its merchandise in regional markets. Together exports to five countries account for close to $8 billion.

The major export destinations are: Bangladesh ($1 billion), Turkey (close to $1 billion); Afghanistan ($2 billion), UAE ($2 billion) and China ($1.8 billion). .

Foreign sales of rice and wheat led to the surge in exports to Bangladesh, Afghanistan and China during the last fiscal year.

Exports to Turkey reached close to a billion dollars. The UAE continues to be among the major buyers with annual exports of around $2 billion whereas earnings from Saudi Arabia touched half a billion dollar mark for the first time, showing a big 25 per cent growth over the year before.

Exports to Bangladesh more than doubled to $1 billion plus in FY11 from less than $500 million in FY10. Main items of exports were wheat, rice, cotton, cotton yarn, knitwear, chemical materials, polyester, bed linen and table linen. Frozen fish/fish products, fruits, oilseeds/their by-products, food items, tanned and semi-finished leather, footwear and motorcycles, were also among major items. Exporters say whereas wheat shipments to Dhaka have almost ended, exports of rice would continue as Bangladesh has been a permanent buyer of the commodity for quite some time.

A member of Karachi Cotton Association attributed sizeable exports of cotton and cotton yarn to Bangladesh in FY11 (worth about $200m), to Pakistan’s competitive prices versus India. “And as for cotton yarn, our quality did matter.” Bangladesh did import cotton and cotton yarn from India as well. But the above factors just created room for our products,” said a textile miller.

Exports of spinning mills and machinery fetched just a few million dollars. “So, we can say these things were imported into Bangladesh by those four or five Pakistani textile millers who have set up manufacturing units there,” said a senior official of Trade and Development Authority of Pakistan.

“Actually, exports to Bangladesh got a boost after we began to sell wheat. Wheat exports alone earned a little less than two hundred million dollars. And our exports were also driven by improved economic conditions in Bangladesh.”

The country’s GDP is estimated to have grown 6.2 per cent in the year to June 2011. And its imports grew 38 per cent compared with just seven per cent a year earlier on rising demand for imported consumer items and industrial needs. .

Afghanistan became a billion dollar market for Pakistan back in fiscal year 2007-08 when Pakistani exporters (worried about lower growth in traditional European and US markets), shifted focus to neighbouring countries. And in FY11 our export earnings from this landlocked neighbour have touched two billion dollars mark. Presence of large number of the US and NATO forces in Afghanistan and international drive for reshaping Afghan economy made this possible. Moreover, renegotiated Afghan Transit Trade accord reduced smuggling from our border areas into Afghanistan. That too benefited exports.

Refined petroleum products, cement, cooking oil, ghee, rice, iron/ steel and their structures and asbestos sheets were among the top export items. Other major items included motorcycles, copper, alloys, meat, milk cream, wheat/wheat flour, fruit juices, bottled water, beverages, pharmaceuticals, paints/varnishes, soaps/detergents, polyester, floor covers, tubes, pipes/hoses, plastic items of household, paper/board, fans, washing machines, electric wires and TV sets, etc.

Exports to China too surged to $1.8 billion in FY11 from $1.16 billion in FY10. Exporters say sales of cotton yarn alone fetched over half a billion dollars, attributing it to lower-than-expected cotton crop in China against its increased domestic need and competitive prices of yarn.

They say that lower-than-anticipated cotton crop this year due to recent floods in Sindh may reduce export volumes of cotton yarn to China, Bangladesh and other countries. But the post-flood rise in prices should prevent any significant fall in export dollars.

Our exports to China include a long list of items ranging from cotton yarn, grey fabrics and textile products to frozen fish and other food items to leather and footwear, chemicals, iron ore, iron/steel bars, marbles, precious stones/jewellery etc. 10 per cent plus expansion in Chinese economy, its proximity with Pakistan, growth in income levels of Chinese people continue to propel exports to Beijing.

Businessmen recall that Pakistan was the only non-communist country to have initiated trade ties with China back in 1950s but could not capitalise on it. India which started trading with it in 1979 now enjoys bilateral trade of $20 billion plus.

In addition to Bangladesh, Afghanistan and China, our exports to Turkey have also shown very rapid growth in recent years.

They are also close to signing a preferential trade agreement anytime during the current year.

Export earnings from Turkey depicted a double-digit growth in FY10 and totaled half a billion dollars before soaring to about $900 million in FY11, according to provisional data of the Federal Board of Statistics. Main items of exports included cotton, cotton yarn, woven fabrics/textile products, polyesters, chemicals, some petroleum products, leather/leather products, carpets, rice, medical/surgical products and sport goods, etc.

Businessmen say as Turkey continues to shift from being supplier of medium and high-value added products to European markets powered by modernisation of its industrial base, it has started looking towards Pakistan and other Asian nations to acquire unfinished industrial raw materials and low-to-medium value-added products. That has opened up new opportunities for our exporters.