Farming key for export growth

Signs of global foreign trade returning to pre-crisis levels have become quite apparent from the growing exports of major developing countries.
But it was different for Pakistan, as favourable market dynamics in the agriculture sector this year have been playing a major role in realizing a nominal degree of recovery in the export bill.
Export turnover for the first eleven months of the current fiscal year reached $17.6 billion; nearly 9 percent higher over the same period last year, and quite close to the export target of $18.86 billion for the ongoing fiscal year.
Better farming output, together with the ban on raw commodity exports imposed by India, supported Pakistans rice exports in the year to date.
But with India considering a lift on its ban on non-basmati exports, and expectations of a drop in domestic rice output next year due to water shortages, rice export might lose its flavour..
On the cotton front, things look dicey as well.
Export proceeds in the value-added textile sector for the current fiscal year until May have enthused neither the government nor exporters, given the decline in export quantity of cotton cloth, readymade garments and knitwear products.
Reeling from this years cotton price hike, downstream textile players are busy lobbying the government to throw more regulatory punches on fibre exports next year.
Apparently, they wish to capitalize on better cotton crop next year, the benefits of which might be lost if much of the cheap raw cotton and yarn is exported to fetch a higher price in international markets.
So far, its unclear if they will have their way or not; but in case they do, the growth momentum of cotton and yarn export might lose steam next year.
And though cement makers have been successful in reaping maximum advantage from the inland freight subsidy offered by the government, those involved in leather and furniture exports have not.
Unhygienic conditions at harbours and sea food processing units, along with poor fish farming practices remain a barrier in increasing the appetite for fish and shrimps caught in Pakistan, in the face of EUs ban on the countrys fisheries export.
Therefore, as was the case this year, next years growth in fisheries sector banks on how seriously the issue of fisheries mismanagement is taken by policy markers.
Given that Pakistans manufacturing sector isn out of the woods yet, next years export outlook depends largely on the countrys agricultural performance.
If growth momentum continues, together with other measures such as inland freight subsidy, perhaps the quandary of energy shortages, price hikes, high borrowing costs amongst other impediments could be mitigated. Lets go farming, folks.

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EXPORT PERFORMANCE

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$ (mn)                     11MFY10     11MFY09     Chg (%)

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FOOD GROUP                   2,993       2,773        7.9%

TEXTILE GROUP.of which       9,325       8,733        6.8%

Raw cotton                     194          83      133.7%

Yarn                         1,292       1,008       28.2%

PETROLEUM GROUP & COAL         891         763       16.7%

OTHER MANUFACTURES GROUP     3,382       3,272        3.3%

ALL OTHER ITEMS              1,011         624       62.1%

G R A N D     T O T A L     17,601      16,166        8.9%

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Source: FBS