High prices drive away interested European buyers, say exporters

FRANKFURT: Pakistan’s textile producers, whether big or small, have received encouraging response from European consumers in the world’s biggest exhibition of home textiles, but still regional rivals edge out Pakistani companies in many cases due to cost advantage.

Alongside big export companies of Pakistan, massive orders have also been discussed with the smaller ones, according to representatives of different companies that had put up stalls in the pavilion set up by the state-owned Trade Development Authority of Pakistan at the Heimtextil exhibition.

Apart from home textiles such as bed linen and towels, the European buyers have also expressed great interest in the textile products used in health facilities. However, an increase in prices of yarn and cotton, which are vital inputs in textile production, has pushed up production cost by 15 to 20%, making it tough for the exporters to finalise orders at competitive prices.

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Shahab Textile Mills Chief Executive Officer Sheikh Ali Ahmed Sadiq told The Express Tribune that they had found great demand for health-care textile products from across the world.

Europe, the US, Middle East and Africa were big markets for such textile goods, he revealed, adding Canada too was a major consumer of health-care textile products, but it had levied 18% duty on exports from Pakistan. On the other hand, Bangladeshi exporters are enjoying duty-free status there.

Pakistan produces scores of health-care textile products of excellent quality which include clothes for patients, bed sheets, specialised bed sheets and towels for operation theatres, gowns for doctors and paramedical staff.

“Though Pakistani products have drawn a great response, their high production cost has left the country uncompetitive in relation to regional rivals. We are losing orders to companies from China, Bangladesh, Turkey, Vietnam, India and Egypt,” said Sadiq.

The Indian government has given concessions to its industries in a bid to help them compete well in the global market.

Sadiq has been participating in Heimtextil since 2013 and considers it a great platform for interacting and forging linkages with big textile buyers. He chastised the government for its “lack of attention” and high production cost of businesses, saying exporters had got bogged down because of these factors.

With the business cost staying high, the exporters also could not reap the rewards of the rupee’s sharp depreciation against the dollar in December 2017. A weaker currency gives price advantage to exporters in the international market, but at the same time it makes imports expensive for businesses.

Speaking on the occasion, Multimet International Executive Director Zafar Saeed revealed that an old customer of the company had come up with a huge order for the Spanish market.

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Spanish buyers were willing to offer a 3 to 4% higher price compared to the previous order, but over the past year production cost in Pakistan had gone up in the range of 15 to 20%, he said.

“Even if we minimise our margins, the goods will still be expensive by around 10%, making it difficult for us to win orders,” he said while pointing out that new buyers from Spain, Poland and Albania had also expressed interest in Pakistan’s home textiles.

Gul Ahmed Textile Mills Chairman Mohomed Bashir pointed to the latest technological advances including digital printing and online export orders being embraced by the home textile industry worldwide.

He suggested that Pakistani companies should adapt themselves to the changing trends in order to secure their place in the international market. More than 200 Pakistani companies took part in the four-day Heimtextil fair that ended on Friday.

Published in The Express Tribune, January 13th, 2018.

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    Original news : https://tribune.com.pk/story/1607248/2-high-prices-drive-away-interested-european-buyers-say-exporters/