Total exports during July-October 1998 were $2.459 billion, down 10 per cent from $2.733 billion in the same period last year, the Federal Bureau of Statistics said.

Exporters said the downturn in Asian economies cut demand for Pakistani textile products, leather and agriculture commodities in the region.

"The global recession has contributed to the decline in exports but the image problem facing Pakistan has been a major factor," said Liaquat Jangda, chairman of the export committee of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

He said political and economic instability coupled with inconsistent government policies have tainted the country's image in international markets.

"Few foreign customers are willing to come to Pakistan....the nuclear tests also did not help," he said.

Pakistan was hit with international sanctions for conducting nuclear weapons tests in May after rival India did the same. Government efforts to curb imports to counter the effects of the sanctions also hit the competitiveness of domestic products.

"The curbs since July have raised the cost of Pakistani products dependent on imported raw material," Gulzar Feroz, a leading leather exporter said.

Textile exports sank more than 13 per cent due to low demand from south-east Asia, destination of Pakistan's major exports.

Pakistani textile exports fell to $1.594 billion in the first four months of the current Financial year compared to $1.837 billion in same period last year. Cotton yarn exports plummeted 28.92 per cent, followed by fabrics at 18.30 per cent.

Leather and related exports declined 22 and 7 per cent in dollar terms, respectively.

"The economic recession in Southeast Asia affected our exports in South Korea and Japan. Even in Europe demand forPakistani leather products is declining every year," Feroz said.

Pakistan's commodity trade picture has also been bleak this year, despite higher domestic production.

An expected 10 per cent rise in rice output over 1997/98's 4.325 million tonnes failed to lift exports this year.

Pakistan exported 276,654 tonnes of rice worth $98.313 million during the first four months of this fiscal year compared to 286,365 tonnes worth $98.721 million a year earlier.

Rice exporter Khalid Ghouri said demand for Pakistani rice in the international market is low, which has dampened hopes of higher exports this year.

Expected cotton production of 10.2 million bales this year is likely to leave a one million bales surplus for export.

Abdul Shakoor Dada chairman of the private Karachi Cotton Association, told Reuters that Pakistan would have to "fiercely compete" in international markets, especially in Southeast Asia, which is a major export destination for Pakistani cotton.

Pakistan is also expecting a sugarsurplus of one million tonnes this year, but exporters are finding it difficult to find markets for exports because of a glut of the commodity and lower international prices.