Textile trade statistics: useful to whom?

Pakistan''s export statistics are ceremoniously released to the press at the end of every month. The media readily scoop this important news and headlines in almost all the newspapers inform their readers that exports (especially textiles) are growing at break-neck speed.
The export figures released by the Trade Development Authority of Pakistan (TDAP) follow a format of product categorisation which is not useful for any meaningful analysis. Firstly, these figures are always "provisional" and hence open for adjustments. Secondly, we don''t know the source of this data, and therefore, not much can be said about the transparency and accuracy of the same.
This article will try to explain all the above reservations, especially with regard to the textile figures, but would also point out how meaningful data, which already exist with various government departments, can be made available to the industry, potential foreign investors and the policymakers for better decision-making.
UNIQUE CATEGORIES TDAP statistics categorise textile and clothing sector into, i) raw cotton, ii) cotton (carded & combed), iii) yarn, iv) fabrics, v) garments, vi) made-ups, vii) towels, viii) tents & canvas, ix) artificial silk & synthetic textiles and x) other textile materials. Then there are sub-categories, for example ready-made garments and knitwear, which are sub-categories of garments, while bed wear is a sub-category of made-ups.
This classification is unique and limited to Pakistan. Any textile professional would point out that garments are also made-ups and canvas is also a fabric. Moreover, synthetic textiles can be in the form of bed linen, garments or fabric. Which specific products come under these categories, we don''t know; after all, a garment is a garment, trousers or shirts what difference does it make?
IMMEASURABLE QUANTITIES Not only is there major confusion in segments but also the quantities of each segment are different making it almost impossible to measure value addition from cotton to garments. For example, raw cotton export quantity is given in metric tons, yarn in kilograms, fabric in square meters and garments in dozens.
If one ventures deeper into these statistics, some unique information comes out. For example, country-wise exports of FY10 show that Pakistan exported ready-made garments worth $393 million to the US, while exports of apparel and clothing amounted to $38 million. TDAP was approached to clarify the difference between apparel and garments but there was no reply from them.
HS CODES While the whole world now follows ''Harmonised Commodity Description and Coding System'' (HS), an internationally standardised system of names and numbers for classifying traded products developed and maintained by the World Customs Organisation (WCO), TDAP follows its home developed categories.
Under the HS system, cotton, cotton yarn and cotton fabrics come under one category, knitted garments are another category, and woven garments and home textiles separate ones. These four chapters cover almost the entire textile exports of Pakistan, categorising each product by not only its type (trouser, jacket, shirts, etc) but also by the type of fabric (cotton, polyester, wool, etc) and the processes involved. Altogether, there are 94 categories in the HS code system covering almost everything under the sun.
SOURCES OF DATA HS code data is nothing new to Pakistan as all imports/exports are now computerised and shipping bills carry product description along with its HS code. The data are already available with Pakistan Customs and Federal Board of Revenue (FBR).
Moreover, the entire textile industry database, along with its exports is now available with Research & Development Advisory (RDA) Cell working under the Ministry of Textile Industry, which it uses for the processing of duty drawback cases. The data have not been shared with the public or the industry. It is worth noting here that export statistics in HS codes are reported to the WTO but never to the public or the industry.
The figures in TDAP''s statistics are provisional, meaning that it is not final. This is understandable as the figures will be finalised once export proceeds are received against shipments but final figures are usually not available at least for another year. Comparison of provisional and final figures yields a deviation of about 1 percent, in general.
Textile sector is now very much documented but the industry still does not have accurate and official figures for its capacity and core products. Although there are many sources of data, some of which are described above, State Bank of Pakistan (SBP) is also a source as the foreign exchange is routed through it.
Export data is also released by the Federal Bureau of Statistics but not in detail. Textile Commissioners'' Office (TCO) can also be a good source but unfortunately not much comes out from there.
Analysis of the export and import data is very important because it helps point out the growth areas in terms of markets and products. It also highlights opportunities for local and foreign investors, and thus can help policymakers design meaningful regulations. If you compare TDAP''s statistics with that of some of the other countries like USA, EU, India and Bangladesh, you will notice that almost all these countries are presenting their data in HS code format, therefore, making it possible to compare products and prepare meaningful analysis.
CONCLUSION The importance of clear and transparent trade statistics can be gauged from the fact that when the EU announced the duty concessions package for 75 items from Pakistan, the products were listed according to their HS codes, and initially, nobody in Pakistan could make sense of that data.
There is no HS-code-based data from the government regarding the value and quantity of a particular product exported from Pakistan. Fortunately, this data is available with a European website and the official document prepared by Pakistan''s ministry of commerce makes use of these figures. If this data were not available, calculation of the impact of these concessions wouldn''t have been more than a guesstimate.
More recently, Turkey has announced its intention to impose preventive duties on fabrics and garments from Pakistan, but can Pakistan''s exports to Turkey be calculated using the categories of the HS codes? A rough idea can be made, but we cannot be sure. We wouldn''t know what volumes under each category are being shipped to Turkey or to the world. Therefore, we cannot even estimate that if we lose this market in Turkey, where else we can concentrate?
Unless and until, export statistics are not presented in a clear and transparent format, TDAP will continue to claim that Pakistan''s textile exports are growing at super-sonic pace with the government and the media hailing this news. On the other hand, the industry would keep arguing that factories are closing and employees are being laid off, whereas the successive governments will keep arguing that previous government''s figures were tampered with.
Clearly, modern economy requires accurate and timely data for smooth functioning -- be it from the regulator''s perspective or from the perspective of the private sector. And in this context, the TDAP and the FBS must play their due role.
The writer has a decade-long experience with Pakistan''s textile industry as export marketing professional. He is currently working for Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA), as a senior research analyst. He can be reached at [email protected]