The recent resurgence in local cotton crop output during the outgoing kharif season by nearly 80 per cent bodes well for Pakistan's denim industry, which has been struggling in recent years.
Once a formidable force in global denim exports, Pakistan has seen a drastic decline in its denim export ranking, slipping from the fifth largest category to not even featuring among the top 15 by 2023.
Historically, Pakistan's denim exports have been vital to its textile and garment value chain, with major players like Soorty, Artistic, US Apparel, Siddiqsons, Sapphire, and Crescent dominating the landscape. These firms not only contribute significantly to denim manufacturing but also support a broader upstream value chain encompassing weaving, dyeing, finishing, spinning, and cotton farming.
However, the past five years have witnessed a staggering collapse in Pakistan's denim fabric exports. Between 2018-19 and 2022-23, export volumes plummeted nearly tenfold, from a peak of 492 million sq m to just over 62 million sq m. This decline was exacerbated by factors such as global trade disruptions due to lockdowns and a surge in raw material yarn exports driven by rising commodity prices.
While there was a brief shift towards exporting higher value-added denim garments directly to consumer destinations in the EU and North America, this did not offset the overall decline in denim exports. In fact, export earnings of the top 15 denim units dropped to $1.8 billion in 2022-23, marking a 17 per cent decrease from the previous year and the lowest in at least five years.
The dismal performance of the denim industry in 2022-23 is largely attributed to the catastrophic impact of the 2022 monsoon floods on the local cotton crop, resulting in the lowest output levels in half a century. This disaster severely hampered the industry's ability to meet demand and disrupted the entire supply chain.
Despite the challenges, the recent recovery in cotton crop output offers a glimmer of hope for Pakistan's denim industry. With concerted efforts to address supply chain disruptions and enhance competitiveness, there is potential for the industry to regain its footing and reclaim its position as a global denim exporter.
