ISLAMABAD-Pakistan Textile Council (PTC) on Monday sought import of cotton from neighbouring India to avoid balance of payment as the move will help the country to reduce trade time and curtail heavy logistics costs.
The PTC, in a statement, said that the country’s textiles industry, which earned more than $19 billion in exports last year, was facing a shortage of raw material as flash floods have damaged about half of the nation’s cotton produce since June. “The unprecedented rainfall resulting in floods has caused havoc in Pakistan,” said the PTC.
One-third of Pakistan was submerged in water, thousands of homes have been destroyed, more than 1,500 people have lost their lives and most importantly about 18,000 square kilometers of cropland has been ruined, including about 45 percent of the cotton crop. The council said that it was imperative for Pakistan to keep its export growth momentum to finance the import bill and keep the balance of payment situation manageable and avoid default conditions. “Import of raw cotton from India must be immediately allowed to mitigate the raw material shortage,” it said.
“The declining textile exports will lead to the balance of payment crisis, and reduced productivity will put a lot of employees’ jobs at stake which the country cannot afford,” the textile council warned.
The statement further said that the country would face a cost far greater than $10 billion in damages, with the loss of food crops alone amounting to about $2.3 billion, a particularly heavy burden at a time of rising food prices around the world.
Pakistan is a major producer of rice and cotton, and both crops have suffered severe damage. As part of the devastation, flood damage will likely force Pakistan to increase cotton imports at a time when production in the US is forecasted to plunge by 28 percent due to drought. And with restrictions on China, Pakistan would not be able to procure raw materials from there as well, the council said.
The outlook for Brazil is also not very encouraging. According to ABRAPA, the drought there has already dried up an estimated 200,000 tonnes of cotton supply. All these factors are causing the price of cotton to increase in local and international markets. Last year, 2021-22, Pakistan’s textile exports rose to an all-time high of $19.3 billion but even achieving this mark would be challenging given unavailability of raw materials to factories.