The last few months have been booming for Pakistan’s textile industry—our textile exports recovered from the initial losses of the coronavirus pandemic. Data published by the Pakistan Bureau of Statistics shows that the textile shipments have surged by 3.8 per cent to $4.8 billion between July and October from $4.6bn a year ago. December overall has been a good month for Pakistan’s exports, with our numbers hitting over $2.3 billion, the highest ever for this month.

Yet while the textile industry seemed to be stable last week, there are symptoms of trouble in the future. Cotton prices in the local market hit a 10-year high of Rs11,000 per maund (40kg) in the week. Some analysts predict that prices may further increase 20 to 50 per cent in the coming days.

The rise in prices has been due to increasing demand. This is good in some ways—cotton is getting huge export orders despite the Covid-19 pandemic led slowdown in economic activities. However, the rise in demand needs to be complemented with a similar increase in production—that is just not happening. Cotton production has declined in the country—this implies something very wrong in the economic process of it all. It means that the growers are not benefitting from the rising prices and thus do not have an interest in increasing production. This is worrying—the rising local demand means that there is a need to import around 7.0 million bales, again hampering the progress that rising export orders would have.

The textile industry, our largest exporter, will lose its competitive advantage should the cost of production be too high. The need for revitalising production is ever prevalent—this is why the government has just evolved a comprehensive package for the textile and apparel value chain to promote local production and exports from the country. It is hoped that through this package, sufficient attention is paid to the growers and farmers to incentivise them into production through good profits.