The Sports Goods Sector in Pakistan - TRTA i

ITC’s Market access Map at www.macmap.org provides information on tariffs and marketaccess measures for 178 importing countries and 200+ exporting countries on an easy to useweb platform.ITC’s Footwear product Map at www.p-maps.org/footwear provides extensive marketintelligence in the form of directly downloadable market studies, a gateway to marketinformation on the Internet and numerous online company directories.These websites have a wide range of users: enterprises, associations, government authorities,financial institutions, statistical bureaus, researchers, academia, press etc.Interested users in Pakistan can request passwords to access these online sources from TDAP,SMEDA, ITC’s Islamabad office, LCCI, KCCI or FPCCI.Below are the case stories relevant to the footwear sector in Pakistan. They are based on datataken from the three websites - purely as examples of the waste amount of data available.Case story I: Insight into trade in leather slippersThe United Kingdom is the world’s largest importer of leather slippers, importing some US$39million worth in 2005, down from US$46 million in the previous year but significantly upfrom US$14 million in 2001. Pakistan is a small player on this market, supplying a mere 23tons (equivalent to 38,333 pairs using a conversion of 600g per pair).Many of the suppliers to the UK market are EU countries, headed by Italy supplying 34% ofUK’s imports in value terms, though India – having gained significant market share recently by2005 had captured 5% of the United Kingdom import market. Like Pakistan, India faces atariff of 4.5% under the GSP regime. Other countries like Bangladesh that have an LDC status,can access the European Union free of duty.On average the UK imports leather slippers at CIF value of US$39,000 per ton (equiv.US$23/pair). By destination this does range enormously. Higher value and presumably highquality slippers are imported from Italy at an average CIF value of US$71,000 per ton (equiv.US$43/pair), while the CIF value of slippers imported from Pakistan is a mere US$3,174 perton (equiv. US$1.90/pair). While the Italian figure seems unrealistically high, the difference invalue compared to slippers from Pakistan cannot be ignored.Italy is itself a significant leather slipper market, buying 352 tons (equiv. 588,000 pairs) in2005 worth US$5.7m. It is not immediately obvious to determine what portion of the Italianimports are sold to Italian consumers and what portion gets value addition and is exported onto a third destination. What is clear though is that Italy adds significant value – importing at anaverage CIF value of US$16,300 per ton (equiv. US$9.80/pair) and exporting at an averageFOB value of US$66,300 per ton (US$40/pair). Like the UK, the Italian leather slippers marketis looking very healthy; Italy imported 35% more leather slippers every year over the period2001-2005. 40% is supplied by India while Germany and Romania supply 27% and 17%,respectively. Pakistan has just managed to poke the point of its foot in the door of this marketsupplying 12 tons (equiv. 20,000 pairs). How does a Pakistani leather slipper differ from theIndian leather slipper? Are the quality standards of the UK and Italian markets beyond thereach of the Pakistan slipper exporters?International Trade Centre 41