International Growth Centre released a report regarding the Trade Composition in Pakistan and made some interesting and worth noting revelations. The report states that most of the Pakistan’s exports are handled by a very less number of large firms. Moreover, the small traders make a very tiny contribution to this figure.
The report mentions that in 2012-13, the number of registered firms with the Securities and Exchange Commission of Pakistan was 50,518. Out of these, only 17,258 are the companies which are involved in the export sector. If we exclude the number of occasional exporters from the list, then the figure further reduces to 10,559.
32% of all the exporting firms deal with the two-way trade (import/export). However, this small ratio of firms makes the 81% of all the Pakistani exports. These companies know how to lower their trade costs, and they possess more knowledge about the international markets than the other companies.
Nearly half of the Pakistani exports (46%) are handled by only 173 exporting companies (only one percent). 75% of all the exports from Pakistan are managed by 5% of all the exporters.
Among the exporting companies, 81% are the manufacturing firms, while the agricultural businesses make 11% of all the exporting firms.
Almost 50% of the exporters export their goods to a single market only and only 19% export to more than five international markets. 32% of the companies send their exports to 2 to 4 foreign markets. U.S, U.K, and U.A.E are the top trading partners of Pakistan. Pakistani exporters prefer to carry out the trade with the low-cost regions like North America, Europe, and Central Asia and avoid to trade with the high-cost regions like Africa, Latin America, and Caribbean Islands.
The majority of the export trade is carried out through the sea ports which makes up to 73% of the shipments, and only 13% exports are handled by the airports.
Karachi is the main hub of Pakistan’s exports. Companies established near the seaports have the advantage to enjoy lower costs as compared to the firms which are present near the airports or in the central areas.
The Pakistani government should take concrete steps for the facilitation and betterment of the small traders and exporters. In this way, the country’s export levels can be improved.
Saman Fawad is a professional content and creative writer. She is an MBA and loves to write about technology, startups, and business articles. She can be reached at firstname.lastname@example.org