The Furniture Sector in Pakistan: Export performance and ... - TRTA i

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Figure 2.2 Wooden furniture imports by top 5 importing countries, 2001- 05 18 16 14 12 Billion US$ 10 8 6 4 2 0 United States Germany France United Kingdom Japan 2001 2002 2003 2004 2005 The United States has continued to grow as the world’s largest importer of wooden furniture. Its imports reached US$16.1 billion in 2005, up by 11% from the previous year. This well reflects the lasting consumer confidence and housing sector strength in the country as well as the domestic producers’ loss of market share to Chinese producers. Housing boom until 2005 was driven in large part by demographics, immigration and affordability. The most recent information shows moderating housing starts, however, as interest rates hike upwards. The United Kingdom grew up into the second place, before Germany. Both countries imported around US$4.5 billion in 2004. France also steadily increased imports to US$3.7 billion. Japan’s imports grew slightly to US$2.4 billion in 2004 after several years of static trade. Pakistan reportedly exports to about 80 countries, of which Malaysia, Italy, the United States, Singapore, Japan, Saudi Arabia and Spain are the biggest buyers. Such a fragmented structure in exports indicates small deliveries to whatever market opens up to Pakistani firms. There appears to be very little concentration on developing a few of the key markets for bigger volumes while leaving the others unattended for. Import sources Over the last year, there have been some significant changes in the trade flows of wooden furniture and parts between regions (Table 2.2). Asia’s role grew even stronger as a supplier to the United States, mainly at the expense of Canada and Europe. China’s currency being pegged to the devaluing US dollar helped to maintain steady trade flows, causing friction with other 14 International Trade Centre
suppliers, both domestic and other import sources. During 2005 - 06, the Chinese currency had been carefully allowed to strengthen at a very gradual speed so that China’s exports may not suffer damage. In the United Kingdom, imports from Asia expanded rapidly in 2005. These are early signs of the gradual rise of inter-regional furniture trade at the expense of traditional intra-regional flows inside the European Union trade bloc. Imports from Poland, China, Vietnam, Brazil, Lithuania, Turkey and Croatia have continued to increase. Table 2.2 Origin of wooden furniture imports for 5 top importing countries, 2004-05 (%) Wooden furniture Exporting region United States Germany France United Kingdom Japan 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 Asia 57.5 61.7 11.1 12.8 13.5 16.6 28.4 35.1 80.1 82.3 North America 19.4 17.6 0.2 0.1 0.4 0.4 1.5 1.9 2.1 1.7 Europe 14.1 11.8 87.2 85.4 81.4 78.6 66.1 59.7 17.6 15.8 Latin America 8.7 8.5 0.7 0.8 3.8 3.1 2.2 2.1 0.0 0.0 Others 0.3 0.3 0.9 0.9 1.4 1.3 1.9 1.3 0.2 0.1 Total imports, US$ billion Incl. furniture parts, US$ billion 14.5 16.1 4.7 4.4 3.5 3.7 4.7 4.6 2.2 2.4 1.6 1.9 0.8 0.9 0.5 0.5 0.7 0.7 0.4 0.5 Source: UN/ECE-FAO, 2006 It is good to remember that even though China has the world’s largest number of furniture enterprises it has no world-famous furniture brands, no master designers, no global sales network and no world-class exhibitions. In conclusion, China rules exports due to its efficient and flexible production at low costs. Major exporters There is a handful of large-scale furniture exporting countries in the developing world. China’s exports have been growing 20-30% per year and it is passing Italy as the world’s biggest exporter. China’s export value reached US$12 billion in 2005. Main destinations are in Figure 2.3. The largest European countries (Germany, France, Spain) and Canada are major exporters to their neighbouring countries and to the United States. International Trade Centre 15
Page 1 and 2: The Furniture Sector in Pakistan
Page 3 and 4: Acknowledgements The report was pre
Page 5 and 6: Abbreviations AFTA AHEC AKTRIN APFE
Page 7 and 8: Table of contents Acknowledgements
Page 9 and 10: Box 3.1 Multilateral discipline of
Page 11 and 12: Executive summary This study sets t
Page 13 and 14: the extent possible maintain or imp
Page 15 and 16: 1 Background and objectives 1.1 EC
Page 17 and 18: 2 Furniture sector in Pakistan 2.1
Page 19 and 20: On the buyer’s side, there are gl
Page 21 and 22: According to the websites of import
Page 23: Global demand for furniture in main
Page 27 and 28: Table 2.3 Pakistani furniture expor
Page 29 and 30: Figure 2.4 Distribution structure f
Page 31 and 32: freight rates have increased and do
Page 33 and 34: Price The prices of local machinery
Page 35 and 36: Indonesia has also announced a ban
Page 37 and 38: industry itself should support effo
Page 39 and 40: various counterparts, the supplier
Page 41 and 42: Box 2.7 UK Timber Trade Federation
Page 43 and 44: Figure 2.5 Simplified example on ch
Page 45 and 46: At least 70% of the wood used in ma
Page 47 and 48: Scope of joint ventures There exist
Page 49 and 50: • With FAO’s Forest Products an
Page 51 and 52: The contact information of many of
Page 53 and 54: Box 2.10 USAID initiative in the fu
Page 55 and 56: Opportunities Major opportunities m
Page 57 and 58: pressure on the price. There appear
Page 59 and 60: Pakistan does not export this furni
Page 61 and 62: 3.1.3 Functional scope The function
Page 63 and 64: Current status of efforts to libera
Page 65 and 66: 3.2.2 Information flow-upwards, i.e
Page 67 and 68: Commission (EC/EU) has established
Page 69 and 70: Figure 3.3 Relevant intensity of WT
Page 71 and 72: Box 3.2 Regional Trade Agreements (
Page 73 and 74: Trade Related Aspects of Intellectu
Page 75 and 76:
Agreement on the application of san
Page 77 and 78:
country or materially retards the e
Page 79 and 80:
Relevance of the furniture sector T
Page 81 and 82:
3.4.2 Other countries’ access to
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Table 3.2 Top 10 buyers of the Paki
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Arabian market. Here again, there i
Page 87 and 88:
• Material from China is being us
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4.2 Obstacles and shortcomings - im
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Raw material recovery Raw material
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• Consistent policy for supportin
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A short-term but maybe a costly mea
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5 Export services in Pakistan 5.1 E
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5.1.3 Federation of Pakistan Chambe
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• Pakistan International Freight
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The lessons learnt here could be re
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6 Conclusion and recommendations 6.
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6.2 Critical success factors • A
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6.4 Global value chains 6.4.1 Poten
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Benefits All timber tends to be air
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• Optimise cutting; • Calculati
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6.6.5 If we had US$100,000: A techn
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• To modernise such a laboratory,
Page 119 and 120:
Annexes Annex A — Sources of info
Page 121 and 122:
• Federmobili information on the
Page 123 and 124:
• National Home Furnishings Assoc
Page 125 and 126:
International Trade Centre 115
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