The trade war between the US and China is expected to benefit Pakistan’s textile sector. It has come as a boon to Pakistani textile exporters as despite poor crop quality and lower domestic cotton production, garment manufacturers are expected to benefit from lower prices of imported cotton.

Already, the domestic textile value add sector is enjoying a great run on the back of the currency depreciation and the resultant price competitiveness of Pakistani manufactured goods in the global market. On import side, increased cost of imported raw cotton due to higher dollar rates is expected to be more than offset by the lower commodity price in the global market.

The US is one of the largest producers of cotton and the imposition of tariffs is expected to put a downward pressure on its raw cotton exports. Already, cotton prices have declined by 75 cents per pound during last week’s future trading. The obvious beneficiaries of the supply glut are net importers such as Bangladesh, Turkey and Vietnam who continue to rely heavily on imported long staple cotton for higher thread count yarn. Exporters like India will also gain some benefit, as Chinese textile manufacturers look elsewhere for raw material.