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FY 1999: Pakistan |
V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT This Section lists 14 sub-sectors in the non-agricultural sector, and 9 in the agricultural sector. The non-agricultural sub-sectors are grouped in three ranks beginning with the most promising (Rank I). The agricultural sub-sectors are listed in descending order of importance. Data are in millions of U.S. dollars, unless otherwise noted. A. Best Prospects for Non-Agricultural Goods and Services Industrial Export Prospects I. Title: Pollution Control Equipment Rank of Sector: (I) Name of Sector: Pollution Control Equipment ITA Industry Code: POL II. Comments: Although the demand for pollution prevention and control equipment slowed somewhat last year due mainly for two reasons: 1) lack of implementation of Environment Protection Agency (EPA) regulations on industry; and 2) slower economic and industrial growth as well as a drop in exports of the two main users of pollution control equipment, the leather and textile industries, the market for pollution prevention and control equipment has the potential to grow at about 10 percent annually as a result of legislation and demand for eco-labelling from foreign buyers of Pakistan products (leather and textiles). Good prospects exist for supply of equipment for: (i) leather tanneries: primary treatment plants for individual units as well as combined secondary effluent treatment plants for clusters of units; (ii) textile mills: primary and combined treatment plants for wastewater; (iii) chemical industry: water pollution from pesticides and insecticides; (iv) fertilizer industry: water pollution. Government and municipal authorities are also looking at ways to control motor vehicle pollution and at solid waste management. There is a preference for used equipment and plants; importers also require after-sales service. The main competitors to U.S. products are the Netherlands, Japan, and South Korea. III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A.Total market size 17.14 25.0 22.00 B.Total local production - - 1.05 C.Total exports - - - D.Total imports 17.14 25.0 20.95 E.Total imports from U.S. 0.86 1.16 1.10 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Agricultural Chemicals Rank of Sector: (I) Name of Sector: Agricultural Chemicals ITA Industry Code: AGC II. Comments: Agriculture is the backbone of Pakistan's economy. Agricultural production is the single major contributor to the Gross Domestic Product (GDP). Forty percent of Pakistan's total area of 197 million acres is cultivable land and produces a wide variety of crops including cotton, rice, wheat, sugarcane and tobacco. Improved government policies and support have spurred agricultural production during the past ten years. The U.S. is a leading supplier of Di-Ammonium Phosphate (DAP) and also has a major share of the market for Malathion. The average import market for agricultural chemicals is about U.S. $272 million which is expected to grow by 10 percent in view of the greater emphasis on raising agricultural production. Other major suppliers of insecticides are Germany, Switzerland, France, and the Netherlands. Most promising subsectors and estimated market size for 1998 are: Di-Ammonium Phosphate ($122 million); Pesticides, Herbicides, and Fungicides ($80 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 906.2 856.9 861.4 B. Total local production 609.5 593.5 606.9 C. Total exports 1.5 2.0 2.0 D. Total imports 298.2 265.4 256.5 E. Total imports from U.S. 134.0 128.0 129.8 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Industrial Chemicals Rank of Sector: (I) Name of Sector: Industrial Chemicals ITA Industry Code: ICH II. Comments: Pakistan's market for Industrial Chemicals is expanding gradually, offering good sales opportunities for U.S. exporters. For FY-1996 the total market is estimated at about U.S. $1,171.5 million, including imports estimated at U.S. $1,036.5 million. Local production of chemicals largely is confined to soda ash, caustic soda, sulfuric and hydrochloric acid, sodium bicarbonate, liquid chlorine, aluminum sulfate, carbon black, acetone and acetic acid. Although imports account for most of the market, local production is expected to increase as new plants come on stream in the next two-three years. U.S. share of imports has averaged between 8 and 10 percent during the last several years. Major competitors are Switzerland, the UK, Germany, China, and Japan. Most promising subsectors and estimated market size for 1998 are: Organic Chemicals ($125 million); Inorganic Chemicals ($68.5 million); Dyeing, Tanning, and Coloring materials ($103 million); Oils, Perfumes, and Flavors ($25 million); Resins and Plastic Materials ($238 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 1,207.0 1,171.5 1,198.2 B. Total local production 172.0 172.0 182.5 C. Total exports 36.0 37.0 38.5 D. Total imports 1,071.0 1,036.5 1,054.2 E. Total imports from U.S. 80.0 75.0 76.0 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Telecommunications Equipment Rank of Sector: (I) Name of Sector: Telecommunications Equipment ITA Industry Code: TEL II. Comments: The telecommunications sector has significant potential for growth. The private sector now actively participates in its expansion and development, supplying cellular telephones, paging services, and card-operated telephones. Despite strong competition from foreign suppliers (Siemens of Germany, Alcatel of France, and Ericsson of Sweden), all of whom have had a strong presence in Pakistan for several years, U.S. firms can increase their market share as Pakistan invests in fiber optics, digital switching systems, and data-communications networks. The anticipated privatization of the Pakistan Telecommunication Company Limited (PTCL) will offer additional opportunities. Most promising subsectors and estimated market size for 1998 are: Telephone Sets ($16 million); Telephone Switching Apparatus ($45 million); Parts for Telecommunications Equipment ($185 million); Electric Telephone Cables ($85 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 310.5 321.5 349.0 B. Total local production 86.5 87.5 89.5 C. Total exports 0.5 1.0 1.5 D. Total imports 224.5 235.0 261.0 E. Total imports from U.S. 7.0 7.5 8.5 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Electrical Power Systems Rank of Sector: (I) Name of Sector: Electrical Power Systems ITA Industry Code: ELP Comments: Electrical power in Pakistan has been supplied by the two public sector utilities, the Water and Power Development Authority (WAPDA), and the Karachi Electric Supply Corporation (KESC). In addition, several independent power plants of a combined net capacity of 3,176-MW may be commissioned by the end of the century. Also, many industrial units have installed their own power generation facilities. Approximately 1,000-MW of industrial demand is now met by stand-alone generators. WAPDA is soon to be corporatized and then privatized, and its role in the power sector limited to the development of hydel power resources. KESC is also scheduled for privatization. The privatization of the two public utilities is expected to result in purchase of new hydel plants and replacement and modernization equipment for existing plants, transmission and distribution equipment and materials. The domestic industry produces a wide variety of electrical power equipment, but imports supply the major portion of the country's demand. The U.S. share of this market rose considerably during the last two years as several IPPS have U.S. sponsors. The U.S. share can be expected to decrease in the future owing to sanctions imposed on Pakistan for its nuclear tests. Most promising subsectors and estimated market size for 1999 are: Power generation equipment (USD 736 million); power transmission equipment (USD 285 million); and power distribution equipment USD 137 million.) III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 1,135.7 1,639.9 1,188.6 B. Total local production 514.5 513.4 362.5 C. Total exports 2.0 1.9 1.25 D. Total imports 823.2 1,128.4 827.35 E. Total imports from U.S. 30.4 80.0 157.16 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Plastic Materials and Resins Rank of Sector: (II) Name of Sector: Plastic Materials and Resins ITA Industry Code: PMR II. Comments: Pakistan offers a good and expanding market for plastic materials and resins. With little domestic production, Pakistan depends largely on imported raw materials to produce a wide variety of plastic products for consumer and industrial uses. Imports of plastic materials and resins in both primary and non-primary forms have grown by more than 10 percent annually during the last several years. Some domestic manufacturing facilities are in the planning stages, but until these plans come on stream Pakistan will continue to depend largely on imported raw materials. The United States, with a market share of about 15 percent in 1996, is one of the leading suppliers. Saudi Arabia and Germany are its major competitors. Other suppliers include Japan, the U.K., Belgium, South Korea, Singapore, the Netherlands, Italy, China and France. Most promising subsectors and estimated market size for 1998 are: Polyethylene, gravity less than 0.94 ($18 million); Polyethylene, gravity above 0.94 ($20 million); Polypropylene ($35 million); Polystyrene ($9 million); Polyvinyl Chloride (PVC) ($35 million); Polyesters in primary form ($10 million); Silicones in Primary forms ($5 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 269.5 257.5 261.6 B. Total local production 7.0 7.5 8.1 C. Total exports 0.5 1.0 1.0 D. Total imports 263.0 251.0 254.5 E. Total imports from U.S. 28.0 28.5 29.4 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Iron and Steel Rank of Sector: (II) Name of Sector: Iron and Steel ITA Industry Code: IRN II. Comments: Pakistan both produces and imports steel products. Pakistan Steel Mills Corporation, a large state owned steel manufacturing facility, and other manufacturers produce pig iron, hot and cold rolled products, ingots and galvanized items. Although domestic production will rise with the proposed expansion of Pakistan Steel, imports of finished steel products is also expected to increase in the next 3 years. There is a growing market for scrap steel which is used by small foundries for producing rods and angles etc.. Major foreign suppliers are the United States, Japan, Germany, France, U.K., China, Belgium and Brazil. More promising sub-sectors and estimated market size for 1998 are: Pig Iron and Ferro-alloys ($62 million), Ingots ($115 million), Flat-rolled Products ($80 million); Coated Flat-rolled Products (110 million); Flat rolled products of Alloy Steel ($52 million); Iron and Steel Tubes and Pipes ($45 million); Stainless Steel Sheets ($5 million); Iron and Steel Bars, Rods and Angles ($12 million); Iron and Steel Wire ($8 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 1,554.0 1,500.0 1,527.0 B. Total local production 1,070.0 1,036.0 1,036.0 C. Total exports - - - D. Total imports 484.0 464.0 491.0 E. Total imports from U.S. 34.0 34.0 32.0 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Drugs and Pharmaceutical Rank of Sector: (II) Name of Sector: Drugs and Pharmaceutical ITA Industry Code: DRG II. Comments: There are over 400 licensed pharmaceutical companies in Pakistan, including 35 multinationals who have over 60 percent of the market share. Approximately one-third of Pakistan's total consumption of pharmaceutical is imported. Imports of finished drugs are expected to increase. There is good market potential for antibiotics, vaccines, therapeutic medicines, analgesics, tranquilizers, hormones and derivates, blood pressure control drugs, anti-ulcerants, drugs for the treatment of cardiac conditions, cancer, psychiatric drugs, contraceptives and birth control prescriptions. Government policy categorizes drugs into essential and non-essential categories. Essential drugs can be imported freely but their prices are fixed by the government. The prices of non-essential drugs are not fixed. At present, nearly ninety percent of the drugs imported are non-essential. Though local production of drugs increased in recent years, the pharmaceutical industry is faced with high taxes and tariffs. Higher costs, compounded by devaluation of the rupee, has affected market growth and is reflected in the figures listed below. Major suppliers include the United States, the U.K,, Germany, Switzerland, Japan, Holland and France: III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 949.7 1,012.5 1,172.6 B. Total local production 658.0 767.0 984.0 C. Total exports 36.3 27.5 21.4 D. Total imports 328.0 273.0 210.0 E. Total imports from U.S. 22.0 15.5 16.8 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Oil and Gasfield Machinery and Supplies Rank of Sector: (II) Name of Sector: Oil and Gasfield Machinery and Supplies ITA Industry Code: OGM II. Comments: Oil and gas account for over 80 percent of the total commercial energy supply in the country. Average oil production during July 95 to March 96 was 56,606 bpd. The production of natural gas during the same period was 1,806 mmcfd. The government attaches high priority to the energy sector. A new petroleum policy announced in October 1997 offers attractive incentives to upstream and downstream petroleum industries to develop an indigenous base in exploration and production. It is expected that the market for oil and gas field machinery and supplies will grow by an average annual increase of 15 percent for the next three years. The total import market during FY-1996 is about U.S. $120 million. Imports from the United States are estimated at U.S. $40 million. The major competitors are Australia, Japan, Singapore and China. Several U.S. companies are actively involved in oil and gas exploration in Pakistan. Most promising subsectors and estimated market size for 1998 are: Oil Recovery and Process Equipment ($52 million); Drilling Equipment for Oil & Gas ($25 million); Separation plant: Oil & Gas ($17 million); Pipeline Equipment ($8 million); Pipeline Corrosion Control ($5 million); Pipeline Construction Equipment ($5 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 141.0 141.0 147.5 B. Total local production 19.0 21.0 21.2 C. Total exports - - - D. Total imports 122.0 120.0 126.1 E. Total imports from U.S. 38.5 40.0 42.5 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Pumps, Valves, and Compressors Rank of Sector: (II) Name of Sector: Pumps, Valves, and Compressors ITA Industry Code: PVC II. Comments: The U.S. is one of the leading suppliers of imported pumps, valves, and compressors. Others are Japan, China, Germany, France, the U.K., and Italy. In the long term growth in industrial activity and investment should continue to result in increased demand for pumps, valves, and compressors. Most promising subsectors and estimated market size for 1998 are: Centrifugal Pumps ($10.5 million); Rotary Positive Displacement Pumps ($7 million); Vacuum Pumps ($5 million); Parts for Pumps ($5 million); Compressors for Refrigeration Equipment ($17.5 million); Air Pumps, Other Compressors ($10 million); Parts for Compressors ($5 million); Pressure-reducing Valves ($2 million); Check Valves ($5 million); Taps, Cocks, Other Valves ($8 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 125.0 118.0 118.5 B. Total local production 50.5 50.0 51.5 C. Total exports 0.5 0.5 1.0 D. Total imports 75.0 68.5 68.0 E. Total imports from U.S. 15.0 15.0 15.5 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Computers and Peripherals Rank of Sector: (III) Name of Sector: Computers and Peripherals ITA Industry Code: CPT II. Comments: With virtually no domestic production, Pakistan offers a highly promising and rapidly expanding market for computers and related equipment. Growth in the personal computer (PC) market is expected to continue very strongly. Several U.S. brands are already in the market and others are being introduced despite strong competition from Singapore, Japan, South Korea, Taiwan, and Hong Kong brands. The GOP encourages use of computer technology in both public and private institutions and organizations, and has recently removed the 10 percent duty on personal computers and CD ROMs. The new trade policy also allows import of used personal computers (less than 3 years old). However, the market for higher-end systems (above 2,000 MTOPS) will be constrained by stringent export controls imposed by the U.S. Government in light of Pakistan's recent nuclear tests. The Government of Pakistan is also planning to establish 3 software technology parks (STP) in the country. Most of the equipment for these STPs will be imported. With the introduction and growth of internet and e-mail facilities in major cities, the demand for personal computers is expected rise rapidly within the next 5-years. Most promising subsectors and estimated market size for 1998 are: Analog-hybrid Data Processing Machines ($5 million); Digital Data Processing Machines ($35 million); Printers ($10 million); Off-line Data Processing Equipment ($20 million); Parts ($15 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 78.50 85.00 86.22 B. Total local production - - - C. Total exports - - - D. Total imports 78.50 85.00 86.22 E. Total imports from U.S. 20.00 25.00 17.50 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Transportation Equipment and Parts Rank of Sector: (III) Name of Sector: Transportation Equipment and Parts ITA Industry Code: TRN II. Comments: With growing interest in U.S.-made vehicles, engines, and components, the U.S. is expected to increase its market share in this sector. Good prospects exist for lease-cum-sales of aircraft (new and used), including engines, and parts. The national flag carrier, Pakistan International Airlines (PIA) plans to upgrade its fleet, but is seriously constrained by lack of funds, and may opt for buying used aircraft or lease new aircraft. The three private sector carriers plan to expand their operations on domestic and international routes, and are in the market for used passenger and cargo aircraft. The rapid growth of inter-city bus services in Punjab province may offer U.S. bus manufacturers an opportunity to introduce their products in Pakistan. Most promising subsectors and estimated market size for 1998 are: Aircraft and Parts ($300 million); Buses and their Chassis with Engines ($400 million); Trucks, Trailers, and Engines ($410 million); Ships and Boats ($150 million); Railway Vehicles ($70 million). III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 2,431.0 2,402.5 2,437.5 B. Total local production 1,540.0 1,542.0 1,564.8 C. Total exports 8.0 7.5 7.6 D. Total imports 899.0 868.0 880.0 E. Total imports from U.S. 125.0 120.0 121.7 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Paper and Paperboard Rank of Sector: (III) Name of Sector: Paper and Paperboard ITA Industry Code: PAP II. Comments: The United States has in recent years become a major supplier of pulp to the Pakistan market, and in PFY-98 is estimated to have supplied approximately 5,000 metric tons of chemical wood pulp, or over 12 pct. of the country's total pulp imports. The U.S. share is expected to increase to 20 pct. of the total import market for pulp because of the price competitiveness of its softwood pulp. Major competitors are Canada, Sweden, France and Indonesia. The size of the newsprint market is estimated to have diminished by nearly 13 percent in PFY-98 to approximately 61,000 metric tons, but the overall value of imports has remained fairly constant. Printers and publishers have commenced using locally-produced writing and printing papers, which are both lower in price and superior in quality to imported newsprint. Recent major suppliers are Russia, Brazil and New Zealand. Local production meets the bulk of the country's requirements for waste paper, as well as for both coated and uncoated paper. Pakistan produces approximately 100,000 metric tons of waste paper per annum. The import market for this commodity has increased from 21,000 to 30,000 metric tons this fiscal year. Pakistan's paper and paper-board production increased in recent years with the establishment of new mills and the expansion of existing plants. Additionally, the superior quality of imported materials and the relatively small price difference between local products and imported materials have established a market preference for imports. The most promising sub-sectors for U.S. exports are: Softwood pulp and specialty papers. III. Data Table: U.S. MILLIONS 1995/96 1996/97 1997/98 D. Total market size 277.90 255.23 325.46 E. Total local production 144.72 155.75 185.5 F. Total exports 0.98 0.90 0.00 G. Total imports 134.16 100.38 139.96 H. Total imports from U.S. 35.00 22.00 15.75 I. Exchange rate (Rupees/$) 33.60 39.10 42.40 N.B. The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. I. Title: Security & Safety Equipment Rank of Sector: (III) Name of Sector: Security & Safety Equipment ITA Industry Code: SEC II. Comments: The market for security and safety equipment is growing steadily. Greater awareness about the range and reliability of security equipment is encouraging banks, corporations and industrial units to protect personnel and premises. The growth rate in this sector is about eight to ten percent. Good prospects exist for baggage x-ray units, identification devices, hand-held and walk-through-metal detectors, intrusion devices/burglar alarms, chemical/bomb detectors, close circuit TV. Major competitors are Germany, the Netherlands, Japan, Korea and Taiwan. Good sales potential exists also for industrial safety equipment and clothing, fire-fighting equipment and alarm systems. III. Data Table: USD MILLIONS 1995/96 1996/97 1997/98 A. Total market size 28.57 24.86 24.13 B. Total local production 2.38 2.81 3.10 C. Total exports 0.48 - - D. Total imports 26.67 22.05 21.03 E. Total imports from U.S. 4.11 4.19 3.81 Exchange rate (rupees/$) 33.6 39.1 42.4 Note: The above statistics are unofficial estimates for Pakistan Fiscal Years (PFY), July-June. B. Best Prospects for Agricultural Exports Agricultural Export Prospects A. Rank: Agriculture (I) B. Name of Sector: Wheat C. ITA or PS&D Code: 0410000 1995/96 1996/97 1997/98 D. Total market size 2700 2497 3065 E. Total local production 2256 2012 2356 F. Total exports 0 0 0 G. Total imports 452 485 709 H. Total imports from U.S. 393 370 389 I. Exchange rate (rupees/$) 33.6 39.1 42.4 Comments: Pakistan is a consistent buyer in world wheat market. However, the size of annual imports hinges upon the domestic harvest. From the supply and consumption factors at play in this market, the imports for MY 1998/99 are initially projected to be 1.5 MMT. The substantial decrease in imports is due to a record wheat crop of 18.5 MMT. The imports from U.S. in 1998/99 will largely depend upon the availability of GSM-102 financing, which has been suspended as a part of the sanctions imposed after nuclear tests. As of today, private sector has contracted for the import of 150,000 MT of Turkish and Australian wheat. Private trade imports became viable due to the bearish world market prices. Wheat imports are required to supplement the domestic supplies to maintain an acceptable level of GOP reserves and to cope with rising domestic requirements. The primary suppliers of wheat to Pakistan are the U.S. and Australia. However, in 1998/99, if the sanctions to use GSM-102 persist then the GOP purchases will originate from Australia. A. Rank: Agriculture (2) B. Name of Sector: Cotton C. ITA or PS&D Code: 2631000 1995/96 1996/97 1997/98 D. Total market size 3089 2551 2100 E. Total local production 3024 2431 2050 F. Total exports 510 32 118 G. Total imports 65 120 50 H. Total imports from U.S. 27 24 16 I. Exchange rate (rupees/$) 33.6 39.1 42.4 Comments: Pakistan's 1997/98 cotton crop was damaged by untimely rains in October, 1997. Most of the cotton growing areas received the highest rainfall in 25 years last October. However, the national average yield was up 4 percent compared to 1996/97 giving crop harvest of 9.2 million (375 Lb) bales. This year cotton imports were down compared to the previous year. The decrease in imports was primarily of the medium staple cotton. Pakistan has imported 113,840 bales in the first 8 months of MY 1997/98. MY 1997/98 imports are estimated at 120,000 bales. This year imports of ELS and LS cotton is estimated between 30,000-35,000 bales. The demand for Pima and ELS cotton is growing because of growth in demand for better quality summer clothing, for which ELS cotton is required. As of May 28, 1998 Pakistan has purchased 68,000 bales from U.S. of Pima /ELS/upland cotton. Of these 42,000 bales have arrived and another 25,000 bales are estimated to arrive by July 31, 1998. All cotton imported must be fumigated at export locations. Pakistan's large textile industry and the country's economic dependence upon that industry require that cotton supplies be assured through imports if domestic production is insufficient. Significant imports are expected only if domestic cotton production falls short of local requirements. However, the textile industry has reported a continuous growth in the demand for Pima/ELS cotton due to increase in requirement for domestic and export market of the better quality end-products. A. Rank: Agriculture (3) B. Name of Sector: Soybeans C. ITA or PS&D Code: 0005 1995/96 1996/97 1997/98 D. Total market size 4.23 13.6 10.8 E. Total local production 0.6 0.6 0.6 F. Total exports 0 0 0 G. Total imports 3.63 13.0 10.2 H. Total imports from U.S. 3.63 13.0 10.2 Exchange rate (rupees/$) 33.6 39.1 42.4 Comments: Pakistan has emerged as a potential market for U.S. soybeans. The crisis in the poultry feed industry in 1997/98 hampered the demand for soybean meal due to about 30 percent decrease in poultry production. As a result expected imports of soybeans in 1997/98 could not be achieved. The feed industry is quickly rebounding after recession in 1997/98. It is expected that soybean imports will be up in 1998/99. For 1998/99, a $10 million PL-480 (Title-I) agreement has been signed for the import of soybeans. The Government of Pakistan has long recognized the importance of a strong oil seed processing industry. Duty free import of soybeans has been allowed for crushing by the solvent industry to enhance capacity utilization and value-added savings to the economy. The total crushing capacity of the solvent plants in Pakistan is about 1.6 MMT. Cotton is the main source of oil-seeds for the industry. Unfortunately, cottonseed meets the requirements of the industry for only 4-5 months. For the remaining period, the GOP has been making efforts to increase the production of sunflower and canola seeds, which will take several years to produce results. At present, there are only 2 units operating at more than 50 percent of the capacity. A. Rank: Agriculture (4) B. Name of Sector: Non-fat Dry Milk C. ITA or PS&D Code: 1995/96 1996/97 1997/98 D. Total market size 56.5 46.0 48.8 E. Total local production 27.0 30.0 31.5 F. Total exports 0 0 0 G. Total imports 29.5 16.0 17.3 H. Total imports from U.S. 0 0 0 I. Exchange rate (rupees/$) 33.6 39.10 42.4 Comments: Pakistan imports about 8,000-10,000 metric tons of nonfat dry milk every year, the bulk of which is provided by East European countries. A market opportunity is emerging. U.S. nonfat dry milk exports are becoming competitive in Pakistan's price conscious market. Pakistan has established different Import Tariff Prices (ITP) for a number of qualities of dry milk powder based on their origin. There is a wide gap between the ITP's for Eastern Europe and other products. All imports are by the private sector, which imports off-grade as well as to ADMI standard specifications from Lithuania, Poland and other countries. A. Rank: Agriculture (5) B. Name of Sector: Consumer Oriented Food Products C. ITA or PS&D Code: 0542400 Pakistan has emerged as a large market for consumer ready food products. Imports of consumer-ready or value added food products are officially reported at $59 million in 1996/97 (July/June) compared to imports of $117 million in 1995/96. A 17 percent devaluation of the local currency and inflationary pressure affected the imports of consumer food products in 1996. There is a whole range of grocery items imported from different countries. Milk and milk products, including baby milk and food were 40 percent of the total imports of consumer ready food products during 1996/97. Processed fruits, food for infants, sugar and chocolates, juices, nuts, baby food and other consumer oriented products are imported in small quantities. Consumption of these foods is growing among the middle income group in urban areas. Of these, imports from U.S. were $1.4 million primarily for the use of diplomats. U.S. market share is small because of lack of market information and reported slow response of the U.S. suppliers. Official imports are generally under invoiced to about 70-75 percent of the C&F price which indicates market size of about $225-300 million. Despite annual devaluation of 13 percent in the last three years, imports of food products have been growing. During 1997/98 coordinated efforts of the FAS/USDA office in Pakistan with the trade has generated imports from the U.S in the first 9 months of 1997/98 of $44 million compared to $45 million in the corresponding period of last year. Imports of alcoholic beverages are not allowed for religious reasons. There are no restrictions on the imports of red meat and butter oil. All other consumer ready food products can be imported under the free list. Commercial imports of consumer ready food products are charged 45% import duty and 12.5% sales tax. Imports are mainly from the United Arab Emirates (UAE) and European suppliers. A. Rank: Agriculture (6) B. Name of Sector: Pulses C. ITA or PS&D Code: 0542400 1995/96 1996/97 1997/98 D. Total market size 418.0 465.0 559.0 E. Total local production 320.0 427.0 509.0 F. Total exports 0 0 0 G. Total imports 98.0 38.0 50.0 H. Total imports from U.S. 0.2 0.1 0.2 I. Exchange rate (rupees/$) 33.6 39.1 42.4 Comments: Pulses are one of Pakistan's top five agricultural imports. Production has been fairly static and Pakistan has occasionally suffered crop shortfalls. Australia, Burma, Iran, and China have been the major suppliers. U.S. dry peas have not been competitive in this market because of higher freight costs and FOB prices, and fluctuations in the availability of TYSON chickpeas. Pulses are one of the basic foods in the Pakistani diet, and the government takes measures to assure their supply at fair prices. A. Rank: Agriculture (7) B. Name of Sector: Livestock and By-Products: Tallow and Grease C. ITA or PS&D Code: 4113200 1995/96 1996/97 1997/98 D. Total market size 40.67 19.81 26.17 E. Total local production 0.8 0.81 0.71 F. Total exports 0 0 0 G. Total imports 39.86 19.0 25.46 H. Total imports from U.S. 0 0 0 I. Exchange rate (rupees/$) 33.6 39.1 42.4 Comments: Pakistan is a large market for imported inedible tallow (animal fats) because it has an extensive soap-making industry, and a shortage of animal by-products rendering from domestic slaughtering. Domestic tallow production is virtually nil, and animal fats are almost all consumed with cooked meat. The compound-feed industry presently uses very little animal fat, foregoing an excellent energy source for poultry feed. The shortage of animal fats and dependence on imports are expected to continue. In July-June 1996/97, Pakistan's tallow imports were of US $19 million. Australia supplied 78 percent, New Zealand 14 percent followed by small consignments from Austria, Malaysia, Singapore and Kuwait. Presently, imported inedible tallow is subject to import duty of 45.0 percent and sales tax of 12.5 percent. A. Rank: Agriculture (8) B. Name of Sector: Hides and Skins, Bovine C. ITA or PS&D Code: 2111102 1995/96 1996/97 1997/98 D. Total market size 398.0 461.0 474.57 E. Total local production 374.0 440.0 458.28 F. Total exports 0.1 0.2 0.2 G. Total imports 24.0 21.0 16.29 H. Total imports from U.S. 0.02 0.5 0.6 I. Exchange rate (rupees/$) 33.6 39.1 42.4 Comments: Pakistan's market for hides, skin and leather is increasing. Pakistan imports fine quality leather. The U.S. share of hide and skin exports to Pakistan is very nominal at this time. However, there is potential for growth in the near future. A. Rank: Agriculture (9) B. Name of Sector: Feed Grains C. ITA or PS&D Code: 0440000 1995/96 1996/97 1997/98 D. Total market size 400.0 316.0 344.0 E. Total local production 400.0 316.0 344.0 F. Total exports 0 0 0 G. Total imports 0 0 0 H. Total imports from U.S. 0 0 0 I. Exchange rate (Rs/$) 33.6 39.1 42.4 Comments: Independent studies of the livestock sector and Pakistan's future animal feed needs have predicted that, as poultry and beef consumption increase, Pakistan will face a critical feed supply deficit and will need to import feed grains. In the next several years, Pakistan may be forced to begin feed grain imports to maintain its current level of per capita meat consumption. As of July 1, 1998, the GOP has eliminated sales tax on imports of feed grains and has lowered the import duty to 10 percent. C. Significant Investment Opportunities The Pakistan Board of Investment (BOI) encourages investment in the following industries: Telecommunication and electronics, fertilizers, pharmaceuticals, mining, hotel and tourism, agro-processing, and petrochemicals.[end of document]
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