EXPLORING POTENTIAL AND OPPORTUNITIES FOR PAKISTAN'S COTTON EXPORT
Ghulam Sadiq Afridi*, Abdul Saboor**, Zahoor-ul-Haq***, Sultan Ali
Tariq**** and Muhammad Ishaq*****
Agriculture is the single largest shareholder to GDP and employment to labour force. It has major share in export but unfortunately unable to meet international standards. This study aims to analyze the pattern of Pakistan cotton export, and to explore sector's export potential and opportunities. This new research endeavor with well-tested analytical tools enabled the trade experts and policy makers to explore the answer of lackness for diversification in export, HS-2- digits aggregated data for cotton sub-sectors have been used with latest data from 2004 to 2013 for the panel of 39 countries. Revealed Comparative Advantage (RCA) index and gravity model approach was employed considering country and time specific fixed effect. The RCA index revealed that cotton sub-sectors have competitive advantage in export and there is gradual gain in the competitiveness with time. The opportunity exists in the markets of low, lower-middle and uppermiddle income countries and countries those have fair trade (low tariff and nontariff barriers) for cotton export. Greater export potential lies with Malaysia, Kenya, Jordan, Thailand, Mauritius, Netherlands, Norway, Australia and Russian Federation for export of cotton, however, export potential for cotton has been exhausted with Canada, France, India, Iran and Saudi Arabia. The study provide the policy information that countries of Latin America, Eastern Europe, Central Asia and Northern Africa are virgin for export. Therefore, Pakistan should penetrate in these markets for export of cotton and other agricultural products. Cognizant to new trade theories, Pakistan should focus on quality to gain maximum trade volume in the markets of high-income countries. Pakistan may develop trade agreement with ASEAN, SAFTA, and EU-27for export of agricultural products.