Karachi: Pakistan is facing a shortfall of around 9 million cotton bales against a demand of 14 million bales. This will have a negative impact on the growth of the country’s textile sector.

“Pakistan’s current cotton production is 5.5 million bales, while demand is 14 million bales,” said Chairman Pakistan Cotton Ginners Association (PCGA) Dr Jassu Mal.

Chairman Karachi Cotton Brokers Forum Naseem Usman confirmed these numbers. “Pakistan will be importing around 9 million bales,” the lead cotton broker told The Correspondent.

The federal government is not involved with cotton or yarn import in the country; however, the private sector is allowed to import cotton and yard without import duty.

The first victim of the cotton import is expected to be the textile sector. Reliance on cotton imports and the upward trend of prices in international markets are expected to limit the potential growth of Pakistan’s textile exports and profitability during the current year.

The total cost of imports could reach up to 6 billion dollars, cotton traders have said.

“Prices are touching ¢82 per pound in international markets now,” Mr Usman said. “Only those who booked the shipments on lower prices will remain in black.”

Further increase in prices in the international market will leave little room for the textile sector to fill the supply and demand gap through imports. Textile exports during the first half of the fiscal year 2021 increased by 7.8%, compared to 5% growth in total exports during same period the previous year.

However, it is noticeable that the sector’s share in total exports stood still at 61 % during the said period, which is not different from the sector’s weight in exports of the previous year.

Much of the growth in textile exports is attributable to the growth seen in the last four months. December 2020, the latest month, saw the highest ever monthly exports at $ 1.4 billion—a growth of almost 23% year-on-year. The upward trend can also be seen from the total textile exports rising by over 9% month-on-month in December 2020.

Chairman PCGA Dr Jassu Mal said that Pakistan’s textile sector has reported growth because cotton was available at low prices. However, sentiments in the international market are now changing, as cotton prices in the international market are now nearing ¢85 to ¢90 per pound, he added.

According to PCGA, Pakistan was the fourth largest producer of cotton in the world; however cotton production in the country has now declined to its lowest. The cultivation area has witnessed over 33% decline during the last few years, and the cotton crop has come down to its lowest level in the last three decades—reaching 0.5 million bales from 1.5 million cotton bales.


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