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