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Despite quality yarn, Pakistan performs poorly in cotton exports

"With an annual harvest of around 13 million bales, Pakistan is the fourth largest producer of cotton, producing about 10 per cent of the total global production of cotton. Pakistan’s textiles industry consists of 11.3 million spindles, 03 million rotors, 350,000 power looms and some 18,000 knitting machines. It has 700,000 industrial and domestic stitching machines."

 

Despite quality yarn Pakistan

Pakistan’s textile tycoons are partly responsible for the sorry state of affairs in its cotton sector for despite availing subsidies in billions, they have neither been able to improve the quality of their products nor bring the sector in conformity with the modern day requirements. Despite being the fourth largest producer of cotton in the world, Pakistan has been performing poorly in cotton trade. Cotton consumption is likely to decline by 12 per cent this year. By consuming 2.2 million tons of cotton, Pakistan would be exporting around $13 billion of cotton products whereas with the same quantity of combined cotton production Bangladesh and Vietnam would generate exports of $54 billion, reveals a recent cotton update by the International Cotton Advisory Committee.

Despite quality yarn Pakistan performs poorly in cotton exports

Pakistan’s consumption of cotton will be equal to the combined Despite quality yarn Pakistan performs poorly in cotton exportsconsumption of the silver fiber in Bangladesh and Vietnam where it is likely to register an increase of 22 per cent and 13 per cent respectively. Responsible for 80 per cent exports and employing 40 per cent of industrial workforce, Bangladesh’s garment sector specialises in low-end clothing and is the main industry of the impoverished nation, which has emerged as the world’s second largest producer of apparel.

Value addition holds the key

Value addition in Bangladesh and Vietnam, two non-cotton producing countries is over four times higher than Pakistan. However, both the countries are among the low value-added textile exporting countries, while China, Turkey, Sri Lanka and Tunisia add much more value to their textiles.

With an annual harvest of around 13 million bales, Pakistan is the fourth largest producer of cotton, producing about 10 per cent of the total global production of cotton. Pakistan’s textiles industry consists of 11.3 million spindles, 03 million rotors, 350,000 power looms and some 18,000 knitting machines. It has 700,000 industrial and domestic stitching machines. In addition, it has a strong fiber base of 13 million bales of cotton and 600,000 tons of manmade, including polyester fiber. There are 21 filament yarn units having capacity of 100,000 tons. The filament and yarn industry is supported by PTA plant which has 500,000 tons capacity. Unlike many competitors which have only primary base or the finished base, Pakistan’s textile industry has a complete value chain which is rare in the world.

Until 2006, Pakistan was one of the most efficient producers of yarn around the world because it possessed better technology than India, China or Bangladesh. But, Pakistan’s textile industry halted its upgrade, and its technology is now older than all the three regional countries. Consequently, the last 18 months have been a nightmare for the energy intensive spinning and weaving industry of Pakistan due to high power tariff and energy shortages. Despite the recent power tariff reduction of Rs3 per unit, the spinning industry is reportedly still facing problems. Around 110 spinning units are still closed down.

Cotton’s role in Pakistan’s economy

Cotton and its value added products chain contribute about 57 per cent to Pakistan’s annual export income. Besides, cotton provides livelihood to 1.5 million farming families and jobs to about 40 per cent of the country’s labour force. In view of its contribution, cotton is often called the life-blood of Pakistan’s economy.

Considering this, the government in 2004 created a Ministry of Textiles to deal with this sector exclusively. Since then there has been a lot of rhetoric about shifting the textile sector from commodity to specialty, value addition, skills and vocational training programmes, establishing textile cities, model garment factories, modern textile laboratories, textile research institutes and special economic zones to facilitate export specific textile industries. However, the export of Pakistan’s textiles, despite subsidies and concessions to the textile industry has continued to decline in the country’s overall exports.

Largely due to high cost of doing business, global recession and subsidies given by the competing countries to their industry, Pakistan’s textile sector has remained stagnant over the last decade. Taking stock of the situation, the government announced the Second Textile Policy 2014-19 on February 15, 2015. This policy aims at making textile sector more competitive, robust, goal-oriented and sustainable. The policy envisages to double textile exports from $13 billion to $26 billion per annum in the next five years. Converting more primary raw materials into value-added product, increased productivity and quality will be the prime focus of this policy.

Pakistan’s textile exports have reduced by 14 per cent over the last six months, despite the second Textile Policy. If this trend is allowed to prevail, it could lead to a reduction of $3.5 billion in exports by the year’s end. Earlier cotton crop failure in Punjab had resulted in $1.5 billion loss to farmers.

 
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