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

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Figure 2.3 Imports of Chinese furniture by major markets 2005 (US$ mill.) USA 6 919 United 924 Kingdom France 260 235 Germany 956 Japan China: furniture factory of the World Source: Tissari, 2006 Other Asian countries like Indonesia (exports US$1.3 billion), Malaysia (US$1.45 billion), Thailand (US$1.0 billion) and the Philippines (US$0.3 billion) have been able to create significant export industries, but have more recently become suppressed by China’s dominant supply position. Vietnam (US$1.15 billion), on the other hand, is increasingly challenging even China in labour cost comparisons, and it has seen its furniture exports surge in the past five years. On the long term, China will champion the mass furniture segment with the help of the abundant labour reserves. However, the availability of wood poses a major challenge to China. From Latin America, Brazil is the biggest exporter with US$0.78 billion furniture deliveries. Mexico was the second supplier with US$0.68 billion. Both countries benefit from proximity with the United States market. African countries are insignificant in international furniture trade. Pakistan furniture exports Pakistan’s exports of wooden furniture totalled US$12.3m in 2005, over double the value exported five years early. Growth in exports of living room furniture (not categorized under office, bedroom or kitchen) was the main contributor to this change. Pakistan has recently started to export bedroom and office furniture. Exports of these furniture types are gaining ground very rapidly, although starting from a small base. The United States, United Kingdom, UAE, Germany and Afghanistan are important destinations. 16 International Trade Centre
Table 2.3 Pakistani furniture exports 2001-05 Product 2001 2002 2003 2004 2005 Growth trend US$ Units US$ Units US$ Units US$ Units US$ Units % ’000 ‘000 ’000 ‘000 ’000 ‘000 ’000 ‘000 ’000 ‘000 Mattress supports Major destinations: Italy, UK, Germany Wooden office furniture Major destinations: UK, US, Afghanistan Wooden kitchen furniture Major destinations: Afghanistan, UK, UAE Wooden bedroom furniture Major destinations: Afghanistan, UAE, US Other wooden furniture Major destinations: US, UAE, UK Wooden furniture parts Major destinations: Germany, US, Saudi Arabia 0 0 65 24 140 20 185 20 387 - NA 14 8 148 10 434 24 803 - 394 - 131 466 19 252 27 365 22 380 23 36 - -38 36 - 9 - 192 - 1094 - 996 - 214 4,392 256 6,676 439 8,692 459 7,721 407 10,427 - 21 139 - 105 208 174 73 - -8 Total 5,047 7,246 10,031 9,263 12,313 Source: ITC calculations based on COMTRADE Market access The major furniture markets are virtually unprotected. The United States has 0% MFN tariff for all wooden furniture categories. The same applies for Japan with one exception – mattress supports, for which it has a 3.2% MFN tariff but GSP tariff of 0%. The EU applies an MFN tariff for wooden furniture ranging from 0-5% and a GSP rate of 0% across all products. Therefore, one can conclude that Pakistan or any other country should not expect much export International Trade Centre 17
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 and 24: Global demand for furniture in main
Page 25: suppliers, both domestic and other
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
Page 83 and 84:
Table 3.2 Top 10 buyers of the Paki
Page 85 and 86:
Arabian market. Here again, there i
Page 87 and 88:
• Material from China is being us
Page 89 and 90:
4.2 Obstacles and shortcomings - im
Page 91 and 92:
Raw material recovery Raw material
Page 93 and 94:
• Consistent policy for supportin
Page 95 and 96:
A short-term but maybe a costly mea
Page 97 and 98:
5 Export services in Pakistan 5.1 E
Page 99 and 100:
5.1.3 Federation of Pakistan Chambe
Page 101 and 102:
• Pakistan International Freight
Page 103 and 104:
The lessons learnt here could be re
Page 105 and 106:
6 Conclusion and recommendations 6.
Page 107 and 108:
6.2 Critical success factors • A
Page 109 and 110:
6.4 Global value chains 6.4.1 Poten
Page 111 and 112:
Benefits All timber tends to be air
Page 113 and 114:
• Optimise cutting; • Calculati
Page 115 and 116:
6.6.5 If we had US$100,000: A techn
Page 117 and 118:
• 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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