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Saudi Arabia – One of the largest trade partners of Pakistan

Published on 28th Apr, Edition 17, 2014

 

Trade figures of last ten years reveal that Saudi Arabia is one of the largest trade partners of Pakistan. Besides bilateral trade between the two countries, Pakistan is the major recipient of workers remittances estimated over $4.1 billion in 2013 while the trend of home remittances indicate further increase in remittances from Saudi Arabia.

It is important to note that the new democratic government in Pakistan has much better understanding with Saudi government, which is reflected in the financial support by Saudi leadership as well as large scale investment is an important factor indicating increasing cooperation between the two countries.

Saudi Arabia is the 10th top export and third top import partner of Pakistan depicting 3 percent and 10 percent share in our total exports and imports respectively. Total trade volume between these two brotherly Muslim countries was US$1,382 billion in 2003-04 that has reached to $4,475 million in 2012-13. As far as bilateral trade is concerned the share of Pakistani exports in Saudi Arabia’s total imports accounts for only 2.06 percent whereas share of Saudi exports in total import bill of Pakistan has amounted to 9.87 percent. In the context of these statistics, Pak-Saudi business counterparts need to strive seriously for bringing bilateral trade volume to up to $10 billion. And this target may only be achieved if Saudi businessmen seek more imports from Pakistan. This will not only help augmenting trade relation but also help in bringing down the trade deficit of Pakistan.

Trade between Pakistan and Saudi Arabia

(Million US $)

Item

Export

Import

Total Trade

Trade Surplus/Deficit

Total export from Pakistan

Share in export (%)

Total import in Pakistan

Share in import (%)

2003-04

365

1,017

1,382

(652)

12,396

2.94

12,396

8.20

2004-05

359

1,665

2,025

(1,306)

14,481

2.48

18,996

8.77

2005-06

322

2,619

2,942

(2,297)

16,572

1.95

24,894

10.52

2006-07

291

3,257

3,548

(2,966)

17,301

1.68

26,873

12.12

2007-08

338

3,610

3,948

(3,272)

20,448

1.65

35,282

10.23

2008-09

415

3,545

3,959

(3,130)

19,125

2.17

31,665

11.19

2009-10

400

3,645

4,044

(3,245)

19,680

2.03

31,132

11.71

2010-11

426

4,451

4,877

(4,025)

25,369

1.68

35,796

12.43

2011-12

456

4,796

5,252

(4,340)

24,718

1.84

40,371

11.88

2012-13

512

3,963

4,475

(3,452)

24,802

2.06

40,157

9.87

Source: State Bank of Pakistan
Major exporting items of Pakistan to Saudi Arabia

Articles of apparel/cloth, made-up textile articles, rags, rice, cotton yarn & woven fabrics and foot wear have been the most important export items of Pakistan to Saudi Arabia.

  Product Label

Pakistan’s Exports From Saudi Arabia

value in 2008

value in 2009 value in 2010 value in 2011 value in 2012
All products

441

425

409

420

455

Rice

136

126

137

95

99

Other made textile articles, sets, worn clothing etc

64

82

50

64

58

Meat and edible meat offal

17

23

38

42

54

Fish, crustaceans, molluscs, aquatic invertebrates nes

13

14

20

17

22

Source: International Trade Center (Trade Map)

After textiles, rice is the most important item of export from Pakistan to Saudi Arabia. However, Pakistan needs to increase its export of par-boiled rice to Saudi Arabia, as it is the preferred type of rice in Saudi Arabia. Besides these, the export volume of spices, cotton American (staple), sports goods, newspapers, surgical instruments sugar, cane and refined is too meager to mentionable. Saudi Arabia should import these commodities in larger quantity. As per sector-wise details available, during the outgoing financial year, export of bedwear to Saudi Arabia from Pakistan went up by 8 percent, garments 28 percent, synthetic textiles 29 percent, cotton fabrics percent, tents and canvas 12 percent, towels 44 percent and even rice exports to the Kingdom grew.

Major importing items from Saudi Arabia to Pakistan

Petroleum is the most important import commodity from Saudi Arabia, which accounts for more than 80% of total Saudi exports to Pakistan. On account of this single commodity the import bill of Pakistan increase which causes huge deficit to Pakistan. Diversifying export items to Saudi Arabia can reduce trade deficit.

In US$ Million

Product Label

Pakistan’s Imports From Saudi Arabia

value in 2008

value in 2009

value in 2010

value in 2011

value in 2012

 All products

5,955

3,500

3,838

4,668

4,284

 Mineral fuels, oils, distillation products, etc

5,051

2,883

2,953

3,686

3,346

 Plastics and articles thereof

256

257

413

452

407

 Organic chemicals

225

152

231

315

334

 Fertilizers

251

85

124

82

78

Source: International Trade Center (Trade Map)
Worker remittances from Saudi Arabia

Workers Remittances increased from $565 million in 2003-04 to US$4,104.73 million in 2012-13, which shows an increase multiple of 8 during last 10 years. These remittances are of great importance for Pakistan’s economy as a non-debt creating source of financing the trade deficit. Furthermore, it also plays an important role in poverty reduction directly and through its spill over effects.

Worker remittances from Saudi Arabia

FY04

FY05

FY06

FY07

FY08

Value (Million US $)

565

627

750.44

1,023.56

1,251.32

FY09

FY-10

FY-11

FY-12

FY-13

1,559.56

1,917.66

2,670.07

3,687.00

4,104.73

Source: State Bank of Pakistan

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