Agriculture and textile sectors 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 on Thursday.
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 $1.75 billion in the fiscal year of
2017/18, while imports from China were recorded at $11.5 billion, resulting
in trade deficit of $9.75 billion.
In 2017, cotton and yarn exports to China fetched $940 million, followed by
ores, slag and ash ($187m), copper and articles ($134m), cereals ($94m), raw
hides and skins ($71m), articles of apparel and clothing accessories, knitted
and non-knitted ($70m), fish and crustaceans, molluscs and other aquatic
invertebrates ($60m), edible fruit and nuts, peel of citrus fruit or melons
($39m), salt, sulphur, earths and stone, plastering materials, lime and
cement ($38m), and mineral fuels, mineral oils and products of their
distillation, bituminous substances ($31).
Cotton and yarn exports account for 51 percent of total exports, followed by
metals (17 percent).
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 two billion dollars 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
$5.5 billion), 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.
Source: The Pakistan Today, Pakistan Monday, 12 November 2018