Boosted ex­ports to China may ben­e­fit Pak­istan’s agri­cul­ture, tex­tile sec­tors

Gulf Times Business - - BUSINESS -

Agri­cul­ture and tex­tile sec­tors of Pak­istan are likely to be the pri­mary ben­e­fi­cia­ries if Pak­istan’s ex­ports to China get dou­bled un­der the re­newed dis­cus­sions be­tween the two coun­tries, a bro­ker­age said yes­ter­day.

Cur­rently, the bi­lat­eral trade is im­mensely tilt­ing in favour of China with Pak­istan’s ex­ports much be­low than the im­ports from the neigh­bour­ing coun­try.

Pak­istan’s ex­ports to China amounted to $1.75bn in the fiscal year of 2017/18, while im­ports from China were recorded at $11.5bn, re­sult­ing in trade deficit of $9.75bn.

In 2017, cot­ton and yarn ex­ports to China fetched $940mn, fol­lowed by ores, slag and ash ($187mn), cop­per and ar­ti­cles ($134mn), ce­re­als ($94mn), raw hides and skins ($71mn), ar­ti­cles of ap­parel and cloth­ing ac­ces­sories, knit­ted and nonknit­ted ($70mn), fish and crus­taceans, mol­luscs and other aquatic in­ver­te­brates ($60mn), ed­i­ble fruit and nuts, peel of cit­rus fruit or mel­ons ($39mn), salt, sul­phur, earths and stone, plas­ter­ing ma­te­ri­als, lime and ce­ment ($38mn), and mineral fu­els, mineral oils and prod­ucts of their dis­til­la­tion, bi­tu­mi­nous sub­stances ($31mn).

Cot­ton and yarn ex­ports ac­count for 51% of to­tal ex­ports, fol­lowed by met­als 17%.

Other top com­modi­ties are ce­re­als, leather, fish­eries, fruits, con­struc­tion and al­lied ma­te­rial and min­er­als. “We be­lieve com­pa­nies like Nishat Chu­nian, Nishat Mills, and Gul Ahmed would be ben­e­fi­cia­ries as they are al­ready ex­port­ing yarn to China,” To­pline Re­search said in a re­port. “Also this would be op­por­tu­nity for all the play­ers to make en­try into Chi­nese mar­ket.” Pak­istan is cur­rently ex­port­ing $2bn worth of rice to global mar­kets, which can fur­ther be en­hanced by ex­port­ing to China.

Matco Foods and Habib ADM are likely to ben­e­fit from in­crease in rice ex­ports to China.

“Sugar sec­tor can also ben­e­fit as the govern­ment al­ready ap­proved ex­port of sur­plus sweet­ener. Govern­ment of­fi­cials have al­ready un­der­lined rice, sugar, tex­tile and agri­cul­tural com­modi­ties, like fruits, in a plan to in­crease ex­ports to China.

A Pak­istani del­e­ga­tion re­cently con­cluded a four-day visit to China aimed at to gar­ner sup­port of the world’s sec­ond big­gest econ­omy for the coun­try’s patchy eco­nomic growth.

Chi­nese govern­ment agreed to widen mar­ket ac­cess to Pak­istani ex­ports, which are es­ti­mated to dou­ble from the ex­ist­ing level.

The govern­ment has been stress­ing the need of rene­go­ti­a­tion of free trade agree­ment signed be­tween the two coun­tries, while in­dus­try of­fi­cials have been point­ing at mis­pric­ing in cross-bor­der trade for long.

A busi­ness ad­vo­cacy group em­pha­sised stan­dard­i­s­a­tion and trans­parency in data col­lec­tion.

“There are great dis­crep­an­cies be­tween Pak­istan’s and China’s re­ported data (par­tic­u­larly for Pak­istan’s im­ports from China, where the discrepancy is $5.5bn), due to pos­si­ble un­der-in­voic­ing, which would mean that se­vere rev­enue losses and tax eva­sion are taking place,” Pak­istan Busi­ness Coun­cil said in a re­port.

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