In the food and textile led growth of exports, other manufactures’ group gets overlooked. Increasing by nearly half a billion YoY for 11MFY18 at a growth rate of 15 percent, this commodity group consists mostly of non-resource based goods further up the value chain. The biggest category within this group is chemical and pharmaceutical products that boasted a growth of 34 percent to contributed $1.3 billion to exports, as per SBP data.
At over $115 million, fertiliser exports were the highest in history while previously the decade average of exports had been $2.7 million. Traditionally, Pakistan’s fertiliser production is consumed domestically with the surplus exported. Better gas availability this year ensured production at near optimum capacity, leaving manufactures with surplus fertiliser.
Pakistan’s plastic exports consist mostly of PET which faced challenges in the international market due to anti-dumping duties levied in the past (for more information read “PET Exports – win some, lose some”, published on May 18, 2018). The victory in the WTO court regarding EU trade restrictions has helped plastics exports achieve a healthy growth of 14 percent YoY.
The nascent pharmaceutical sector also witnessed 14 percent growth YoY and clocked in at $241 million for 11MFY18. Given the regulatory environment the sector operates in and the lack of FDA approval, its average double digit growth of 12 percent over the last decade is commendable. A way to circumvent FDA requirements and elbow into the international market would be through herbal products that face relatively less restrictions internationally but for which Pakistan has a non-existent presence. (For more information read “The herbal potential”, published on May 23, 2018).
At over half a billion dollars, the category of other chemicals carries weight more because of quantity rather than quality. From paints, varnishes and soap to polymers of propylene, styrene, and vinyl chloride, myriad types of products are grouped under this category, most of which don’t amount to more than a few million dollars each. As a whole, exports of other chemicals increased by 18 percent that amounted to nearly $100 million which was averaged out over a number of products.
Most of these sectors are usually addressed in the tail end of incentive packages and policy changes. With limited government support, the chemical sector and pharmaceutical sectors have time and again requested a better regulatory environment and stable policies that are implemented. Despite the challenges, these sectors have witnessed growth. Imagine the growth rate these sectors would enjoy if their concerns were addressed.
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