Most Indians and Pakistanis Work in Agriculture and Textile Sectors

About 60% of India's workforce is in agriculture. Textile industry is the second biggest employer, accounting for a fifth of India’s exports, and employs almost 10 percent of India’s workforce, or some 35 million people, and has the potential to add another 12 million new jobs --dwarfing the 1-2 million jobs created by the much-heralded IT and BPO sector, according to a World Bank report.

The largest number of people in other South Asian nations are also employed in the agriculture sector, followed by textile manufacturing as the second largest employer.

About 60% of India's workforce is engaged in agriculture, contributing about 16% of GDP, according to published data. Textile manufacturing claims the second largest employment and comprises 26% of manufacturing output. It accounts for a fifth of India’s exports, and employs almost 10 percent of India’s workforce, or some 35 million people, and has the potential to add another 12 million new jobs --dwarfing the 1-2 million jobs created by the much-heralded IT and BPO sector, according to a World Bank report. Even the most optimistic estimates by NASSCOM put the total direct and indirect employment in IT and ITES sectors at 10 million jobs.

The textile sector is crucial to India's economy. The textile industry contributed 4% of India's gross domestic product in the year that ended March 31, and accounted for 13.5% of Indian exports, bringing in $17.6 billion, according to the Wall Street Journal.

With the Indian rupee soaring — up 9 percent against the dollar in the last 16 months, textile exports are down 6.4 percent from a year earlier in the $10 billion Indian clothing industry, according to a recent report in the New York Times.

About 23% of the India's workforce is part of the services sector which accounted for 55% of the GDP in 2007. Within the service sector, the fastest growing segment is business services, contributing about 7% of GDP. It includes information technology enabled services (ITES), information technology (IT), business process outsourcing (BPO) etc. In 2000, it was one third of the total output of services.

Agriculture in Pakistan accounts for 19.4% of GDP and 42% of labor force, followed by services providing 53.4% of GDP and 38% employment, with the remainder 27.2% of GDP and 20% workers in manufacturing sector. Over half of Pakistan's manufacturing jobs are in the textile sector, making it the second biggest employer after agriculture.

The dire situation in India's agriculture sector has been epitomized by over 200,000 farmers' suicides in the last decade. And the rising Indian rupee is now hurting India's textile sector by making its exports more expensive in the world market.

Pakistan's agriculture and textile sectors have also suffered in the last two years. Reduced water flows from India followed by recent floods have adversely affected large swathes of Pakistan's farmland. And the current energy crisis combined with the economic slowdown have hit the textile industry particularly hard. The European Commission, the EU's executive, has recently approved tariff waivers on 75 categories of imports from Pakistan for up to three years, according to a report in the Wall Street Journal. The gesture followed an order by EU leaders wanting to demonstrate they're helping some 10 million Pakistanis left without shelter in the wake of floods.

Pakistan shipped about $4.2 billion of exports to EU last year. About 75% of Pakistani exports to EU are textiles, clothing, leather or related products, and those goods will make up a majority of the roughly $140 million in total extra trade the EU says the deal will generate from eliminating the EU tariffs.

Here is a quick comparison of different sectors of the economy in India and Pakistan in terms of employment and GDP contribution:

Country....Agri(emp/GDP)..Textiles..Other Mfg..Service(incl IT)

India........60%/16% ...........10%/4%.....7%/25%...........23%/55%

Pakistan......42%/20%...........12%/8%......8%/18%...........38%/54%

Assuming India's PPP GDP of $3.75 trillion (population 1.2 billion, nominal gdp $1.3 trillion) and Pakistan's $450 billion (population 175 million, nominal gdp $167 billion)), here is what I calculated in terms of per capita GDP in different sectors of the economy:

India vs. Pakistan: Per Capita GDP $3,125 PPP ($1,083 nom) vs. $2,570 ($955 nom)

Agriculture: $833 PPP ($288 nom) vs. $1,225 PPP ($454 nom)

Textiles: $1,242 ($433) vs. $1,714 ($636)

Non-Textile Mfg: $11,155 ($3,870) vs $5,785 ($2,142)

Services $7,246 ($2,590) vs $3,654 ($1356)

Data shows that the majority of Indians who work in agriculture and textiles are on average 50% poorer than their Pakistani counterparts, as also reflected in the under-$2 a day per capita income figures for 60% of Pakistanis and 76% of Indians.

Agriculture Value Added Per Worker in Constant 2000 US$ (Source: World Bank


It also shows that Indians in manufacturing and services sectors add almost twice as much value as Pakistanis, and produce significantly higher value goods and services than their Pakistani counterparts.

The income range in India is much wider from $883 to $11,155 accounting for the much bigger rich-poor gap relative to Pakistan's relatively narrower range from $1225 to $5,785.

The challenge for India is to improve its farmers' productivity and move some of them into higher value added sectors of the economy.

The challenge for Pakistan is to have its manufacturing and services sectors produce more goods and services of higher value, and continue to migrate more of its farmers into other sectors of the economy.

It's clear that farming and textiles continue to be the most important economic sectors with the biggest impact on the lives of the majority of ordinary citizens of India and Pakistan. And just as the US and EU look after their farmers, it is very important for South Asian governments to protect their farming and textile sectors even as they promote diversification of their economies.

Related Links:

Haq's Musings

Pakistan Textile Industry Report

Pakistan's Farmland Controversy
Peepli Live and India's Farmers' Suicides

Floods in Pakistan
Pakistan's Textile Woes

Agricultural Growth in India, Pakistan and Bangladesh

KPMG Report on Pakistan Economy 2010

India and Pakistan Contrasted
Pakistan's Major Business Sectors
Labor Laws: To Create Good Jobs, Reform Labor Regulations

Foreign Investors Buying Pakistani Farm Land
Is Leasing Agricultural Land to Foreigners a Good Idea?

Pakistan's Sugar Crisis and Dietary Habits

Wheat Research and Development in Pakistan

Pakistan's Water Crisis

Wheat Productivity, Efficiency and Sustainability

Agrarian Reform in Pakistan
Urbanization in Pakistan

Water Scarcity in Pakistan

Pakistan Agribusiness Report 2009

Pakistan to Lease 700,000 Acres to Arab States

Pakistan's Total Arable Land

Comments

Riaz Haq said…
Assuming India's PPP GDP of $3.75 trillion (population 1.2 billion) and Pakistan's $450 billion (population 175 million), here is what I calculated in terms of per capita GDP in different sectors of the economy:

India vs. Pakistan:

Agriculture: ($833 vs. $1,225)

Textiles: ($1,242 vs. $1,714)

Non-Textile Mfg ($11,155 vs $5,785)

Services ($7,246 vs $3,654)

It shows that Indians in manufacturing and services sectors add more value and produce higher value goods and services than their Pakistani counterparts.

The income range in India is much wider from $883 to $11, 155 accounting for the much bigger rich-poor gap relative to Pakistan's range from $1225 to $5,785.
Anonymous said…
The lower agriculture and textiles numbers reflect the smaller size of Indian farms and the Indian government subsidies to small scale textile manufacturing outfits.
Riaz Haq said…
Over 17,000 Indian farmers committed suicide in 2009, according to an Indian government report:

NEW DELHI (AFP) – More than 17,000 Indian farmers committed suicide in 2009, a seven percent rise on the previous year, according to new government figures.

The National Crime Records Bureau (NCRB) study titled "Accidental Deaths and Suicides in India" revealed the rise without attributing causes, with the states of Maharashtra, Karnataka and Andhra Pradesh the worst affected.

Many farmers, particularly in the southern and western states listed, were pushed further into debt in 2009 after the weakest monsoon in 37 years left fields parched and crops ruined.

Despite economic development in cities, two out of three Indians still live and work in rural areas and as many as 150,000 farmers have killed themselves in the past decade, the Tata Institute of Social Sciences said in 2009.

The subject was taken up in an acclaimed Bollywood film last year called "Peepli Live" made by the production company of superstar Aamir Khan.

The film, directed by first-time director Anusha Rizvi, revolves around two poor farmers who face losing their land over an unpaid debt after poor monsoon rains, with one considering killing himself so that his family receives compensation.

In other statistics, the study said that a total of 127,151 people took their own lives in 2009 and about 125,000 people or about 350 a day died on the country's notoriously dangerous roads.

Road deaths increased by 7.3 percent in 2009 from 2008, following a long-term trend that has seen road deaths mirror increases in vehicle sales.

Since 2005, the number of fatal road accidents has increased by 30 percent, tracking a 35-percent rise in the number of vehicles.

India's booming economy is raising personal incomes and corporate profits, enabling middle-class consumers and businesses to invest in greater numbers of cars, vans and lorries.

However, as a study published in the British medical journal The Lancet last week pointed out, economic change sometimes produces harmful behavioural shifts, such as driving faster and further without due regard to safety.

The head of the National Safety Council of India (NSCI), K.C. Gupta, told AFP last September that changing attitudes was a "huge job" but that economic development would lead to more awareness.

India's generally bumpy and overcrowded roads remain poorly policed and chaotic in nature.

Whole families are often found crammed onto a single motorbike -- with only the father wearing a helmet -- while the overloading of trucks and buses is endemic.

A total of 175 people died of starvation and thirst in 2009, 261 in bombings, 25,911 from drowning, 8,539 from electrocution and 1,826 had fatal falls into manholes or pits. Around 8,000 died from snake or other animal bites.

Experts warn that government statistics in India should be treated with caution because of inefficient public administration in many areas, meaning accidents go unreported.
Riaz Haq said…
Here's some UNCTAD data on cotton production and consumption in the world:

In 2007, cotton was grown in 90 countries. In 2006/07, the four main producing countries were China, India, the USA and Pakistan and accounted for approximately three quarters of world output. If we added Uzbekistan and Brasil, six countries would account for 83% of world cotton production. This concentration in cotton production, which appears to increase for several years, has to be put into perspective by considering the impact of domestic policy reforms in the largest cotton producing countries, as well as climatic and sanitary contingencies.
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The main cotton producing economies also account for a large part of consumption. According to ICAC data, China, the United States, India, and Pakistan as a whole have accounted for approximately more than 55% of global cotton consumption over the period 1980 to 2008. Their overall consumption has risen considerably in volume (see figure below). For example, consumption multiplied by 3 in China and by more than 3 in India. Pakistan has had the largest increase in volume (which multiplied by 6 between 1980 and 2008) in order to responde to export-driven demand for textiles.
Riaz Haq said…
Here are some excepts from a recent Wall Street Journal story titled "In India, Doubts Gather Over Rising Giant's Course":

These days, India often is held up as an example of how a democracy in Asia can mirror the spectacular growth of authoritarian China. In the year ending March 31, India's economy is expected to expand by about 8.5%.

Other important gauges of national well-being paint a more troubling picture. "What has globalization and industrialization done for India?" asks Mr. Venkatesan, Microsoft's former India chairman. "About 400 million people have seen benefits, and 800 million haven't."
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Calorie consumption by the bottom 50% of the population has been declining since 1987, according to the 2009-10 economic survey conducted by India's Ministry of Finance, even as those at the top of society struggle with rising obesity. Mainly because of malnutrition, around 46% of children younger than 3 years old are too small for their age, according to UNICEF.

Infrastructure in cities and the countryside remains woefully inadequate: In recent years, China has added, on average, more than 10 times as much power as India to its electricity grid each year.

Data from McKinsey & Co. show that the number of households in the highest-earning income bracket, making more than $34,000 a year, has risen to 2.5 million, from 1 million in 2005. But the ranks of those at the bottom, making less than $3,000 a year, also have grown, to 111 million, from 101 million in 2005.
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India's modernization was expected to prompt a mass movement of workers from farms to factory floors—a critical component in the transformation of China, South Korea and other Asian nations. But manufacturing as a share of India's economy stood at 16% in 2009, the same as in 1991, according to the World Bank.

Services have increased dramatically as a proportion of gross domestic product, rising to 55% in 2009, from 45% in 1991, according to the World Bank, becoming the chief engine of India's economic strength. But many of the fastest-growing areas, such as finance and technology, employ relatively few and rely heavily on skilled employees. The entire software and technology-services sector, including call centers and outsourcing, directly employs just 2.5 million workers, a tiny fraction of the overall work force.
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Agriculture's share of the economy, meanwhile, has declined to about 17% in 2009, from 30% in 1991. But the number of people working in agriculture hasn't dropped commensurately, according to Arvind Panagariya, a professor of Indian political economy at Columbia University in New York. "The dependence on agriculture remains incredibly high when you compare India's high-growth phase with others," he says. "The potential of the country is to grow at 11% to 12%, and it's growing only at 8% to 9%."

Frustration over the economic miracle's limited trickle-down is fueling political movements around the country. Most base their appeal, in part, on the idea that the poor are being ill-served in the new India.


http://online.wsj.com/article/SB10001424052748703313304576131792120382006.html?KEYWORDS=india
Riaz Haq said…
Here are some excerpts from an Op Ed in The Hindu on growing disconnect between mass media and mass reality:

•The mass reality in India (which has over 70 per cent of its people living in the rural areas), is that rural India is in the midst of the worst agrarian crisis in four decades. Millions of livelihoods in the rural areas have been damaged or destroyed in the last 15 years as a result of this crisis, because of the predatory commercialisation of the countryside and the reduction of all human values to exchange value. As a result, lakhs of farmers have committed suicide and millions of people have migrated, and are migrating, from the rural areas to the cities and towns in search of jobs that are not there. They have moved towards a status that is neither that of a ‘worker' nor that of a ‘farmer.' Many of them end up as domestic labourers, or even criminals. We have been pushed towards corporate farming, a process in which farming is taken out of the hands of the farmers and put in the hands of corporates. This process is not being achieved with guns, tanks, bulldozers or lathis. It is done by making farming unviable for the millions of small family farm-holders, due to the high cost of inputs such as seed, fertilizer and power, and uneconomical prices.
•India was ranked fourth in the list of countries with the most number of dollar billionaires, but 126th in human development. This means it is better to be a poor person in Bolivia (the poorest nation in South America) or Guatemala or Gabon rather than in India. Here, some 83.6 crore people (of a total of 110-120 crore) in India survive on less than Rs.20 a day.
•Eight Indian States in India are economically poorer than African states, said a recent Oxford University study. Life expectancy in India is lower than in Bolivia, Kazakhstan and Mongolia.
•According to the National Sample Survey Organisation, the average monthly per capita expenditure of the Indian farm household is Rs.503. Of that, some 55 per cent is spent on food, 18 per cent on fuel, clothing and footwear, leaving precious little to be spent on education or health.
•A report of the Food and Agriculture Organisation of the United Nations shows that between 1995-97 and 1999-2001, India added more newly hungry millions than the rest of the world taken together. The average rural family is consuming 100 kg less of food than it was consuming earlier. Indebtedness has doubled in the past decade. Cultivation costs have increased exorbitantly and farming incomes have collapsed, leading to wide-scale suicides by farmers.
•While there were 512 accredited journalists covering the Lakme India Fashion Week event, there were only six journalists to cover farmer suicides in Vidharbha. In that Fashion Week programme, the models were displaying cotton garments, while the men and women who grew that cotton were killing themselves at a distance of an hour's flight from Nagpur in the Vidharbha region. Nobody told that story except one or two journalists, locally.
Is this a responsible way for the Indian media to function? Should the media turn a Nelson's eye to the harsh economic realities facing over 75 per cent of our people, and concentrate on some ‘Potemkin villages' where all is glamour and show business? Are not the Indian media behaving much like Queen Marie Antoinette, who famously said that if people had no bread, they should eat cake.
No doubt, sometimes the media mention farmers' suicides, the rise in the price of essential commodities and so on, but such coverage is at most 5 to 10 per cent of the total. The bulk of the coverage goes to showing cricket, the life of film stars, pop music, fashion parades, astrology…

http://www.hindu.com/2011/06/04/stories/2011060455071000.htm
Riaz Haq said…
Here are some excerpts of an Asia Times review of a book titled "The Imperial Messenger" criticizing NY Times columnist Tom Friedman's work:

A new book on the influential New York Times columnist Thomas Friedman sets out to debunk his hawkish, neo-liberal views, accusing him of overt racism, factual errors and skewed judgments on issues ranging from the United States invasion of Iraq to the Israeli-Palestinian conflict.

Deconstructing one of the country's highest-paid journalists, Belen Fernandez's The Imperial Messenger: Thomas Friedman at Work presents a comprehensive overview of the man - and three-time Pulitzer Prize winner - she describes as "characterized by reduction of complex international phenomena to simplistic rhetoric and theorems that rarely withstand the test of reality".
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The Imperial Messenger looks at Friedman's obsession with US global dominance, his Orientalism vis-a-vis the Arab/Muslim world, and his special relationship with Israel.
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Fernandez explained that the first chapter, "America", incorporates Friedman's "cheerleading of punitive economic systems at home and abroad" while the "Special Relationship" chapter delves into the inconsistencies of his persona as a serious critic of the Jewish state.

"His criticism, of course, is limited to intermittently encouraging the Israelis to slightly curtail settlements," Fernandez told Inter Press Service (IPS). "Not because he cares about the plight of non-settlers, but because he wants to avoid a situation in which Palestinians demand equal rights in a multiethnic democracy."

As an example, Fernandez cites his advocacy of the war in Iraq "to create a free, open and progressive model in the heart of the Arab/Muslim world to promote the ideas of tolerance, pluralism and democratization".

She says Friedman wrote this after having said in 2002 that "unless the US encourage(s) alternative energies that will slowly bring the price of oil down and force Arab/Muslim countries to open up and adapt to modernity - we can invade Iraq once a week and it's not going to unleash democracy in the Arab world".

In the same year, Friedman classifies the invasion of Iraq as "the most important task worth doing and worth debating", even while admitting that it "would be a huge, long, costly task - if it is doable at all, and I am not embarrassed to say that I don't know if it is".

In the "Arab/Muslim World" chapter, she quotes Friedman as concluding that the "short answer" for why the US invaded Iraq and Afghanistan in response to 9/11 "is because Pakistan has nukes that we fear and Saudi Arabia has oil that we crave".
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After stripping down columns, articles and his books, Fernandez said her perception of Friedman worsened from beginning to end.

"I realized how truly criminal his behavior is, whereas before I had thought of him more as a somewhat amusing purveyor of mixed metaphors who had by accident ascended to the post of New York Times foreign affairs columnist," she told IPS.

"The New York Times is totally complicit in Friedman's crimes, just as it was complicit in selling the whole business of the Iraq war. The degenerate state of the mainstream media, which actively sides with corporate profit over human life, is simply a testament to the importance of alternative media outlets."


http://www.atimes.com/atimes/Global_Economy/ML10Dj01.html
Riaz Haq said…
Here's a market research report on Pakistan's agriculture sector:

Pakistan Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Pakistan's agribusiness service.

Pakistan's agricultural output has steadily declined in its contribution to GDP in the past decade, down from 24.0% in 2000/01 to 20.9% in 2010/11. That said, the sector still employs the largest number of workers in the population and we expect the industry to remain a government priority as the country deals with issues of food security and the vulnerability to natural disasters. Over the long term, we foresee the dairy, poultry and wheat industries as benefiting the most from increased investment.

However, despite the existing network of irrigation systems across the country, we believe that significant improvements in infrastructure and better supply chains will have to be implemented in order for the country to reap the full benefits of its fertile soil.

Key Trends

- Rice production out to 2015/16: 7.5% to 7.3mn tonnes. We expect the country to increase its share in the basmati rice trade as production expands over our forecast period.
- Wheat consumption out to 2016: 14.2% to 25.3mn tonnes. Consumption growth will be driven by rising incomes and population growth, as well as increased access to good-quality milk.
- Sugar production out to 2015/16: 35.1% to 4.8mn tonnes. Large-scale consumers such as confectioners, candy makers and soft drink manufacturers account for about 60% of the total sugar demand and will be the main drivers of growth.
- 2012 Real GDP Growth: 3.8% (up from 2.4% y-o-y in 2011; forecast to average 3.7% from 2011 to 2016).
- Consumer Price Inflation: 11.2% average in 2012 (down from 13.7% in 2011).
- Central Bank Policy Rate: 12.0% (lower than 14.0% in 2011)
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South Asia rice exporters should benefit the most from the recent rice trade disruptions out of Thailand. So far, traders report that more than 100,000 tonnes of rice for export have been stalled as a result of the country's worst flooding in decades. Some sources estimate that this could rise to more than 300,000 tonnes. Given these developments, the spotlight has now turned to South Asia to meet demand for the grain in the near term.

Despite the recent floods, which destroyed approximately 20-30% of the sugarcane crop in the Sindh region, we forecast 2011/12 sugar output from Pakistan at 4.1mn tonnes, 2.5% up from our previous estimates. This is largely due to an overall 5-8% increase in sugarcane yields, area harvested and favourable monsoon rains during the growing season. Sugar crushing is estimated at 82% and sugar recovery at 8.8%. According to provincial reports, higher sugar prices farmers received last year, coupled with strong demand from the industrial sector, have boosted planting in the provinces of Punjab, Sindh and Khyber Pakhtunkhawah.


http://www.researchandmarkets.com/research/b503cb/pakistan_agribusin
Riaz Haq said…
Here's a Daily Times story on Karachi Textile Expo 2012:

The textile sector is likely to fetch more than $45 million export orders during three-day 9th Textile Asia 2012 International Exhibition, textile experts said Saturday.
During previous international event in 2011, Pakistan fetched more than $31 million worth of orders for different categories of textile products, they added.
Adviser to Prime Minister on Textile Dr Mirza Ikhtiar Baig inaugurated the 9th Textile Asia 2012 event at Karachi Expo Centre.
It is the largest annual textile and garment machinery show of textile industry of Pakistan.
This year more than 276 exhibitors from 39 countries representing 369 international brands are participating in the event.
Besides a large number of textile sector’s representatives along with 271 foreign delegates are attending the exhibition.
The demand for textiles in the world is around $18 trillion, which is likely to be increased by 6.5 percent. China is the leading textile exporter of the world’s total exports of $400 billion.
Export of China stands at $55 billion, Hong Kong $38 billion, Korea $35 billion, Taiwan $16 billion, and Indonesia and Pakistan $14 billion.
Pakistan has emerged as one of the major cotton textile product suppliers in the world market with a share of world yarn trade of about 30 percent and cotton fabric about 8.0 percent, having total export of $13.8 billion, which accounts for only 1.2 percent of the overall share. Out of this cotton fabric is 0.02 percent, made-ups 0.18 percent and garments is 0.15 percent.
Textile sector is the backbone of the country’s economy having 56 percent of total exports and 38 percent job creation in the manufacturing sector. Nearly all the world-renowned brands are manufactured in Pakistan keeping high standard of international quality and competitiveness.
Pakistan is the fourth largest producer of cotton yarn and cloth in the world after China, which is number one besides, Pakistan ranks second in export of yarn and third in export of cloth and fourth largest producer and consumer of raw cotton.
The textile sector in 2011 has registered an impressive growth of 38 percent and it was expected after European Union’s (EU) duty free export of 75 products from Pakistan out of which 65 are textile products, the sector would fetch more than $25 billion export target. The EU facility is initially for two years, extendable for third year after which Pakistan would quality for Generalised System of Preferences (GSP) plus status to export duty free to EU as per revised criteria agreed with EU.


http://www.dailytimes.com.pk/default.asp?page=2012\03\11\story_11-3-2012_pg5_12
Riaz Haq said…
Cotton availability in Pakistan rises 25% YoY, reports fiber2fashion:

There has been a substantial increase of more than 25 percent in arrival of cotton in Pakistan markets this season compared to last season.

Besides, there has also been a significant rise of 77 percent year-on-year in cotton exports from Pakistan this season.

Citing figures from Pakistan Cotton Ginners Association (PCGA), Mr. Muhammad Azam, Secretary-General and Chief Operating Officer of All Pakistan Textile Mills Association (APTMA), told fibre2fashion, “Compared to total arrivals of 11,502,408 cotton bales of 170 kg each during 2010-11 season up to March 1, 2011, a total of 14,378,962 bales have arrived in market this season up to March 1, 2012. Thus, there has been an increase of 2,876,534 bales or 25.01 percent over the previous season.”

Informing about the number of cotton bales pressed by various ginneries across Pakistan, he says, “Up to March 1, 2012, this season, 14,301,516 bales were pressed at various ginneries. In comparison, 11,467,821 bales were pressed during the same period in 2010-11 season. Thus, 2,833,695 bales or 24.71 percent more bales have been pressed this season.”

Talking about cotton exports, he says, “The exports have boomed 77.89 percent this season. Pakistan exported 920,706 bales up to March 1 this season, against exports of 517,567 bales registered during the same period last season. Thus, 403,139 more bales have been exported this season.”

“The textile mills in Pakistan have consumed only 17.68 percent or 1,871,840 more bales this season compared to previous season. Up to March 1, 2012, textile mills in Pakistan purchased 12,462,112 cotton bales, against their purchase of 10,590,272 bales during the same period in 2010-11 season,” he mentions.


http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=109064
Riaz Haq said…
Here's a Businessweek report on Faisalabad textile industry troubles:

Chaudhary Maqsood Elahi, a Pakistani exporter of knitted garments, spent two years trying to save his factory in the textile hub of Faisalabad. He sold his house, cut down on staff and switched to air shipments to meet orders on time. It didn’t work.

About six months ago, Elahi, whose Dilkhush Hosiery Mills Ltd. produced t-shirts for European mega-retailers Carrefour SA and Metro AG, shut down his 15-year old factory after booking losses for two straight years. He fired 550 workers, tore down his plant and divided the land into plots that he put up for sale to help repay loans, Bloomberg Businessweek reports in its April 30 issue.

“I kept running the factory despite losses in the hope of finding a way out but the financial burden kept growing,” said Elahi, 56.

Pakistan has one of the largest textile industries in the world, shipping 1.3 trillion rupees ($13.8 billion) worth of textiles in the year ended June 30 mostly to the U.S. and Europe. Textiles account for 63 percent of Pakistan’s exports and mills employ 20 percent of the nation’s workforce. Faisalabad, which generates the most tax revenue after Karachi, accounts for half of all textiles shipped from Pakistan.

The Pakistani textile industry has had a golden opportunity to capture markets lost by Chinese producers because of rising wage pressures in China and the appreciation of the yuan. But according to the Pakistan central bank’s annual economic report for the year ended June 30, 2011, the local industry hasn’t been able to seize the advantage.
Bangladesh, Cambodia

Instead, Bangladesh and Cambodia have increased sales of apparel as Pakistani manufacturers struggle with energy shortages, the report says.

Power blackouts last as long as 20 hours at a stretch in Faisalabad, while shortages of natural gas, which power the looms, can go on for six days at a time. Demand for natural gas exceeds supply by as much as 15 percent in the city.

Half the city’s 250,000 power looms have gone out of business in the past 12 months, 10 percent of the spinning mills and fabric printing units have shut down and half of the remaining plants are struggling to survive, says Muzammil Sultan, president of the Faisalabad Chamber of Commerce and Industry. At least 200,000 workers have lost their jobs since last year. “We’re shipping only half the quantity we used to from this city,” Sultan says.
Cotton Belt

Faisalabad, a city of 5 million people surrounded by Pakistan’s biggest cotton belt, was once known for attracting workers from across the Punjab province to run its weaving mills, spinning units and garment factories.

Now, as the textile business faces its biggest ever crisis, workers have begun leaving the city for the first time. “I’ve already moved my family back to Peshawar and if I can’t make this new tire repair business work, I will also move and try to find some other work,” says Sher Shah Khattak, who came to Faisalabad 35 years ago to work in the textile trade and lost his job as a loom operator last year.

In March, thousands of textile workers came out on the streets of the city, burned tires and shouted slogans against the government. “The change in the city is visible with just 10 percent of factories closed, and we see rioting by workers because of the growing frustration,” says Sheikh Abdul Qayyum, managing partner of Em Que Fabrics in Faisalabad. “We can’t imagine what would happen if half of all mills stop working.”..


http://www.businessweek.com/news/2012-04-25/pakistan-s-city-of-looms-turns-silent-as-mills-close
Riaz Haq said…
Here's an ET report on falling Lotte profits because of oversupply, lower demand and lower prices of polyester:

KARACHI:

After making more than Rs2 billion in the same quarter last year, Lotte Pakistan PTA profits nosedived 93% to Rs151 million amid falling prices of its primary product during January to March 2012.

The massive decline was on account of reduced primary margins amid oversupply of the product emerging in the Asian PTA (purified terephthalic acid) industry.

PTA is widely used in making polyester fibres along with food and beverage containers. Polyester fibres are used to make fabrics for apparel and home furnishings such as bed sheets and curtains. It is also spun together with natural fibres such as cotton to produce a cloth with improved properties such as wrinkle resistance.

Demand from the PSF sector has shifted towards cotton amid bumper crop and lower prices.

The result is still better than market expectation as analysts expected the company to post a loss. The stock value increased by Rs0.16 to Rs8.79 at the Karachi Stock Exchange on Tuesday.

PTA prices fell 18% to average $1,190 per ton in the review period compared with US$1,457 per ton in the same quarter last year.

Overall gross margins dipped to 2% compared with 24% in the same quarter last year.

Reduced earnings also attributed to 52% decline in interest income to Rs130 million against Rs272 million in the period under review. The company’s cash balance has declined due to capital expenditure associated with its power project.


http://tribune.com.pk/story/369985/corporate-results-lotte-pakistan-profits-fall-from-billions-to-millions/
Riaz Haq said…
Here's Daily times report on cotton & textile industry in Pakistan:

All Pakistan Textile Mills Association (APTMA), with over 50 percent ($14.8 billion) contribution to the total national exports ($25 billion) and 78 percent share in the textile exports of the country, is the largest trade union of Pakistan as well as contributor to the national economy of the country.

Due to effective policies and leadership of APTMA, this year cotton production increased to 15 million bales despite two million bales lost due to floodwaters, as compared to the last year’s 11.7 million bales, thus making Pakistan self-sufficient in cotton sector for the first time in 10 years.

To rid the country of energy crisis, the association is actively engaged with various stakeholders, including the Sui Northern Gas Pipeline Limited (SNGPL), Petroleum and Gas Ministry and standing committees of the National Assembly. Out of 300 days, gas remained closed for 156 days causing loss of $5 billion cotton to production capacity of the country. Advocating the case effectively with the government, the association ensured five days a week gas supply to the industry, besides getting electricity load shedding exemption.

The association’s proposal of levying gas surcharge for gas exploration and laying of new pipelines was accepted. The APTMA leadership and members are also advocating for the Vision 2020 to resolve the gas crisis and sustainable growth of the energy sector, while clarifying how much energy is going to be produced from hydel, coal and other sources besides gas exploration. The association believes that only a futuristic vision can ensure affordable energy for the industry as well as domestic sector of the country.

APTMA group leader Gohar Ejaz said their strong advocacy for the free market mechanism during 2010-11 helped transfer Rs 400 million to Pakistani cotton farmers, equal to their income of eight years, and in the wake of price increase in the international market, remained the biggest contribution of APTMA for the welfare of the stakeholders. He said farmers got prosperity, which resulted in value addition to the crop and an increase of $5 billion export. While in 2011-12, resolving the energy crisis for the Punjab industry remained one of the biggest contributions of APTMA, he said.
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Research and development is the key to survival and growth of any industry. Realising this aspect, APTMA has made it a law to collect Rs 20 per cotton bale from the mills to spend this amount on research through Pakistan Central Cotton Committee (PCCC), a semi-autonomous body, with the federal minister for textile industry as its president. Last year, APTMA contributed Rs 300 million, as collected against the production of 15 million cotton bales in the country.

APTMA is also fulfilling its corporate social responsibility towards promotion of textile education in Pakistan. The association established textile colleges in Faisalabad, Karachi and other cities, which were later handed over to the government.

Established since 1957, APTMA is the premier textile industry association having 350 member mills and offices in Lahore, Karachi, Islamabad and Peshawar. Although textile sector has a total 14 associations of various stakeholders, APTMA is the only body, which is taking up the case of whole sector to provincial, national and international level for the growth of the sector – from farmer to exporters.

Textile industry contributes 8.5 percent of the GDP, while APTMA is 50 percent of 8.5 percent textile contribution towards GDP. APTMA provides direct employment to one million workforce as well as three million indirect jobs.

Pakistan is the fourth largest cotton producer in the world as 98 percent of 15 million cotton bales produced in Pakistan are consumed by APTMA members.


http://www.dailytimes.com.pk/default.asp?page=2012\05\07\story_7-5-2012_pg7_5
Riaz Haq said…
Here is a News story on Pakistan's textile-based exports:

Leading economists and entrepreneurs from other sectors at a discussion program titled ‘What is wrong with Pakistan’s economy?’, regretted the textile-specific approach of Pakistan’s economic planners that had led to the exclusion of other more lucrative sectors like engineering, information technology, mining and fuel, and agricultural products.



“Pakistan should look beyond textiles to ensure sustained exports and economic growth,” they claimed “as textiles, with only a 5.6 percent share in the total global trade, limit the opportunities for broad based growth. And textiles are also the first casualty in a recession.” Engineering entrepreneur Almas Hyder appealed to the government to have a wider vision and make a paradigm shift in its industrial policy. He said that attention should now be focused on sunrise industries like engineering, chemicals, bio-technology, IT, agriculture-livestock and pharmaceuticals.



Almas said that the government should realign its economy as well as its resource allocation to ensure uninterrupted growth. If these sectors had been given equal importance as that given to textiles, it would have shielded the economy from the ups and downs in a global economy. He said that in a recession, the first expense that people cut down on is of clothing, which is the reason that the textile trade has always come under stress in case of a global or regional recession, as the one being witnessed in Europe these days.



Senior Economist Naveed Anwar Khan pointed out that manufacturing and engineering goods account for 67.50 percent of the total global trade, while mining and fuel account for over 12 percent, agricultural products 10 percent and non-ferrous metals 1.8 percent. Instead of giving attention to around 94 percent of the global trade, Pakistan was only concentrating on the 5.6 percent textile’s trade.



He averred that this preference and attention bestowed on this sector, in the form of energy and power, has not paid any dividends as Pakistan’s share in the total global textile trade remained less than 2 percent. And that even Bangladesh, which had entered the textile sector in the early 1990s, had higher textile exports than Pakistan. He summed up that while the textile sector should be facilitated by the state, other sectors should also be given equal importance.



“Value addition in engineering goods is much higher than the value addition in textiles” stated Iftikhar Ali Malik, former president Federation of Pakistan Chambers of Commerce and Industry. He elaborated that auto parts made from plastic, steel or even cardboard fetched a much higher price than the cost of their raw materials. While 70 percent of the input cost was cotton in yarn manufacturing, in a car filter or a plastic or steel auto part, the cost of the card board, plastic or steel was10-20 percent and the value addition was high.



He regretted the fact that the engineering goods manufacturers were not facilitated by the state in the same way as textiles were by them. The added that the engineering industry has a long gestation period and is more entitled to concessional credit than textiles.


http://www.thenews.com.pk/Todays-News-3-114084-Preferential-treatment-of-textiles-decried
Riaz Haq said…
Ex-Cabinet Secy Regrets Introducing GM Cotton in India
TSR Subramanian said he launched GM cotton in 1990s and the decision was responsible for suicide of thousands of cotton farmers.

http://www.news18.com/news/india/ex-cabinet-secy-regrets-introducing-gm-cotton-in-india-1469313.html

Former Cabinet secretary TSR Subramanian on Friday said that he regrets having allowed Genetically Modified (GM) cotton in the country over two decades ago.

"In 1990s, I introduced GM cotton in India. Twenty years later, I regret...I am responsible for suicide of thousands of cotton farmers," Subramanian said at a panel discussion at a book launch function.

Subramanian, a 1961 batch IAS officer, further said that most European countries and Japan don't allow GM crops. Talking about the performance of the Narendra Modi government, Subramanian said, "This government has done wonderful work in three years. I believe that the present dispensation should get 10 years."

"Failures of India can largely attributed to IAS class...Blame also should go to economists of India who studied in Harvard, Oxford University and now working for the Government of India but don't know anything about India," he said.
Riaz Haq said…
From Underwear to Cars, #Modi's #India’s #Economy Is Fraying. Underwear sales are down 50 percent, car sales are down 32%. #BJP #Hindutva

https://www.nytimes.com/2019/09/21/business/economy/india-economy-trade.html

When Alan Greenspan ran a consulting firm and wanted to know where the economy was headed, he would often look at sales of men’s underwear as a guide.

Mr. Greenspan, who later served as chairman of the Federal Reserve, believed that when times were tough, men would stop replacing worn-out underwear, which no one could see, before cutting other purchases.

By that measure, India is in a serious slump.

“Sales are down 50 percent,” said Jeffrin Moses, gesturing toward the boxes of cotton briefs and tank tops bulging from the shelves of the Tantex undergarment emporium in Tirupur, the southern city where most of the country’s knitwear is made.

It’s not just underwear. Car sales plunged 32 percent in August, the largest drop in two decades, and carmakers are warning of one million layoffs as shoppers balk at rising prices and struggle to get loans from skittish lenders. Macrotech, a big real estate developer that has teamed up with President Trump on a residential tower in Mumbai, just laid off 400 employees as demand for new housing sinks.

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The textile industry, which employs about 45 million people and is India’s second-largest employer after agriculture, is emblematic of the country’s distress.

On an afternoon in early September, Tirupur’s market for wholesale, overstock and slightly defective clothing was deserted. Mr. Moses said that store owners and distributors typically traveled across India to place bulk orders for shirts, pants, dresses and fabric before the country’s September-to-November festival season.

“Now, people do not come,” he said.

The region’s spinning mills, which twirl cotton into yarn, are cutting production. Although the world price of cotton has plunged because of the increased American tariffs on Chinese textiles, owners say that yarn prices have also fallen, making it difficult for mills to profit.

“I haven’t seen a slowdown like this,” said Gaurav Gupta, a son of one of Dollar’s founders, as he walked through the company’s plants. “For a customer who used to buy six pairs of garments, now he has come down to probably four.”

Still, Dollar’s Italian-made cutting machines continue to slice colorful sheets of fabric for undershirts and underpants, six days a week. About 100 workers sort the pieces and tie them into bales, ready for contractors who will sew them into finished garments.

Dollar has not laid off anyone yet, although it has cut work hours — and paychecks — by 10 to 20 percent. Mr. Gupta said his factories were switching to making thermal underwear for northern India’s chilly winters, and he hoped that the festival season would mark the beginning of a turnaround in sales.

Sambhu Karwar, a 22-year-old employee who smooths the fabric before it is cut, said the job was better than working in his family’s bakery in eastern India. Dollar pays him a monthly salary of 12,000 rupees, or about $167, and provides lodging and some subsidized food.

“It’s good living here,” said Mr. Karwar, whose brother also works at the factory.

The outlook is bleaker at Siva Exports, a contractor that stitches some of Dollar’s underwear.

Most of the sewing machines in the two-story factory sit idle. Siva’s owner, V. Murugesan, said he had to lay off about three-quarters of his tailors over the last six months after he lost his two biggest clients — clothing brands in Italy and France. He said he could not match the prices they could get in Bangladesh, where wages are far lower.
Riaz Haq said…
#India's #Modi is turning to deregulation amid an #economic crisis. So far, the overhaul has led to more confusion. The poor have been hit hardest by #COVID19, with migrants returning from cities & unable to support families in rural areas. #BJP https://www.wsj.com/articles/india-turns-to-economic-overhaul-as-growth-prospects-slide-amid-coronavirus-11602586802 via @WSJ

measures—the BJP passed a flurry of politically difficult changes.

In a single swoop, it dismantled a longstanding regulatory system that forced farmers to sell most of their crops through government-approved wholesale markets dominated by traders and middlemen instead of directly to consumers or food processors.

Then the BJP passed a series of new labor measures that increased the number of companies that can fire workers without government permission, raised the barriers for workers to unionize, relaxed rules preventing women from working night shifts and restricted unions’ ability to organize strikes. At the same time, it expanded the country’s social security program to include many contract workers.

Jitendra Singh, a minister in the BJP government, said the changes would ultimately improve farmers’ economic prospects, especially in far-flung rural areas, by giving them more options for selling their crops. The BJP has also said it doesn’t intend to phase out government wholesale markets or minimum price supports.

The agricultural industry overhaul went into effect immediately, while most of the labor-market changes will be implemented before the end of the year.


The measures add to a mixed record of economic changes by Mr. Modi and the BJP. The prime minister’s controversial 2016 move to instantly remove almost 90% of the country’s currency in circulation hobbled the economy for years with little benefit to show for it, economists say. Overhauls of the country’s bankruptcy code and the country’s tax system have been broadly applauded, despite complaints about how they have been implemented.

The latest changes have sparked an uproar, including from opposition parties that once promoted the very same policies and even from farmers who are supposed to be the main beneficiaries.

----------

Economists say the changes could ultimately be a boon for the Indian economy, which depends heavily on agriculture. Farming accounts for about 17% of total income in the country, and provides employment for close to two-thirds of India’s working-age population.

The daunting challenge may be implementing them during a double-barreled economic and health crisis—even though the desperation of the country’s economic state is what finally cleared a political path for an initiative both the BJP and its main opposition have at times supported.


“In a word, all reforms are good in theory,” said Vivek Dehejia, an expert on the Indian economy at Carleton University in Ottawa, Canada. “In practice, I worry it may be too little too late, and I’m not confident that market incentives work well during a time of a public safety emergency.”

If the changes can be maintained long enough for legions of traders and middlemen entrenched by the government-created monopoly wholesale markets to be replaced by competitive markets, then farmers should ultimately benefit by capturing at least some of the profits that have traditionally gone to those buying and reselling their crops, said Shubho Roy, an economist at the University of Chicago who has studied the wholesale market system.
Riaz Haq said…
PM asks industrialists to help promote corporate farming

https://www.blogger.com/comment.g?blogID=8278279504304651957&postID=8353606962549198723

Stressing the expansion of corporate farming, Prime Minister Imran Khan on Friday sought proposals from industrialists to modernise agriculture sector and enhance production of various crops.

In a meeting with the country’s leading industrialists and businessmen, the prime minister said national development and prosperity was linked with the development of the business community, facilitation of which was the responsibility of the government.

He said the government had included the industrialists’ proposals in policymaking, which have started producing positive results.

The PM directed the authorities concerned to resolve export-related issues faced by the industrialists at the earliest.

The delegation included Azam Farooq (Cherat Cement), Bashir Ali Muhamamd (Gul Ahmed), Muhammad Ali Taba (Lucky Cement), Saqib Shirazi (Honda Atlas), Fawad Mukhtar (Fatima Fertilizer), Arif Habib (Arif Habib Group Ltd) and Hussain Dawood (Engro Corporation).

Industries & Production Minister Hammad Azhar and Advisers to PM Abdul Razak Dawood, Dr Abdul Hafeez Sheikh and Dr Ishrat Hussain were also present on the occasion.

The delegation thanked the premier for patronizing trade activities in the country. They said the highest level of foreign exchange reserves reflected economic stability and expressed satisfaction over the availability of the government’s economic team for guidance.

The delegation also termed the country surplus current account ‘a welcome sign for national economy’.

They informed the PM that the demand of cement was highest in the country’s history due to promotion of construction activities, which helped generate immense employment opportunities during the pandemic.

Riaz Haq said…
Woven together, the rise and fall of southern Pakistan’s Banarsi sari

https://www.arabnews.com/node/1858791/fashion

Banarsi silk was a luxurious hand-woven fabric once made in the city of Khairpur, in Sindh
No official data exists on the history of the industry and the stories are told by the weavers themselves
SINDH: At the Banarsi Silk Weavers’ Colony in the city of Khairpur, in Sindh, 47-year-old merchant Zafar Abbas Ansari was waiting, hoping for a few additional orders of silk Banarsi saris as Eid Al-Fitr approached.
The sari is a garment native to South Asia, where a long piece of cloth is wrapped elaborately around the body — usually in cotton or silk — and worn with a matching blouse.
Although the city does not make Banarsi any longer — it is now made in Karachi, more than 400 km away — customers still come to the city to purchase the fabric.
Inside the deserted 70-year-old market — once a bustling place — Zafar’s shop is among the last three Banarsi shops left. His family is one of the 40 weaver families who brought the industry to Khairpur when they migrated from India in 1952.
“It is almost two decades since Khairpur stopped producing Banarsi saris after the industry’s collapse. However, even today, the brand is popular among customers. They keep demanding Khairpur’s brand,” Zafar told Arab News.
In its heyday, Khairpur’s Banarsi sari was synonymous with luxury, with vendors supplying the fabric not only locally but also exporting to Pakistani families living in the UK and other European countries.
Inside Zafar’s shop, unstitched pieces of colorful saris — the blouse, the petticoat and main sari fabric — are displayed. The shop shows off different varieties of saris, including the traditional katan — a plain woven fabric with pure silk threads — chiffon, as well as synthetic fabrics.
“Banarsi sari has distinction and standing,” Zafar said proudly. “It is worn by royal families because of its grace and elegance. In some families it is an essential part of the bridal trousseau.”

The price of a sari depends upon its type. The most expensive sari fabric available in the Khairpur market currently is worth Rs45,000 ($300) a piece
Khairpur’s Banarsi Silk Weavers’ Colony is named after the city of Banaras in India (now Varanasi) because of the silk weavers who migrated from there.
There are no official records, and the story of the garment comes from the weavers themselves. They say the history of the Banaras sari industry in Khairpur is linked with Ghulam Saddiquah Begum — the wife of Khairpur state’s then ruler, Mir Ali Murad Khan Talpur of the Talpur dynasty.
Saddiquah Begum herself came from Bahawalpur state, and in 1949, the weavers said, during a visit to India’s Hyderabad Deccan, she offered Mohammed Yusuf Ansari — a sari trader from Banaras — the chance to start manufacturing in Khairpur.
She is said to have offered her state’s support for the establishment of the manufacturing units required.
In 1952, about 40 families of the Ansari clan migrated from Banaras to Khairpur and sari manufacturing began on handlooms. Later, the saris were exported to other countries.
Arab News could not independently verify this information.
According to Anjum Sajjad Ansari, grandson of Muhammad Yusuf Ansari and a representative of the Banarsi Silk Weavers’ Association Khairpur, at its peak there were 400 handlooms in Khairpur. Today, not a single handloom remains.
“At Khairpur’s Banarsi Silk Weavers Colony today there are 16 houses of traditional weavers. However only three are involved in this business of selling Karachi-made fabric,” Anjum said.
Like elsewhere, the Banarsi brand was associated with pure silk thread work. Initially, Khairpur used silk imported from China, but later the silk came from Punjab’s Changa Manga as Pakistan developed hatching silkworms and silk fiber producing factories.
The whole family engaged in the manufacturing process, including silk weaving, dyeing, warping, and reeling. It took between two to three days’ work to complete a single sari.

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