https://arab.news/wgq4e
- Textile mills warn of severe cotton crop loss, urge government to declare national emergency
- Analysts project up to five million bales lost, threatening $6 billion in damages for the industry
KARACHI: Pakistan’s textile manufacturers expect cotton imports to surge to as much as $3 billion this year, double last year’s bill, after floods devastated key growing areas in Punjab and now threaten Sindh, industry officials and analysts said.
The monsoon deluges, which have already swamped central Punjab, the nation’s breadbasket, are moving south toward Sindh, the country’s second-largest cotton belt, raising fears that further damage to fields will deepen losses in the days ahead. Agriculture makes up nearly a quarter of GDP and employs almost half of the labor force, according to the Pakistan Bureau of Statistics.
“Probably, our cotton import can exceed $2.5 to $3 billion this year alone,” said Kamran Arshad, chairman of the All Pakistan Textile Mills Association (APTMA), adding that millers imported $1.5 billion worth of cotton last year from Brazil, the United States, Africa and Australia.
Arshad said cotton-growing areas in central Punjab such as Vehari, Mailsi, Chichawatni and Burewala had been “negatively affected,” while some genetically modified Bt cotton crops were also under water.
“This can lead to a crisis, because a lot of people will be losing their livelihoods. Their crops will be at stake,” he said, urging the government to declare a national emergency and curb luxury imports to conserve foreign exchange.
He also blamed record water releases from upstream India for compounding the devastation. Under the 1960 Indus Waters Treaty, India controls the eastern rivers but is required to notify Pakistan of dam discharges that can cause downstream flooding.
Flood damage has also undermined projections for Pakistan’s top export industry, which earned $18 billion last year.
“We were projecting a growth in textile exports from $18 billion to up to $20 billion in the coming year, but I don’t think that level will be achieved because of the unavailability of cotton and the higher cost of production,” said Ahsan Mehanti, chief executive of Arif Habib Commodities.
He estimated the industry could face a $6 billion hit, including about $4 billion in additional import costs and $2 billion in lost export potential. “This flood will have a devastating impact not only on cotton output but the exchange rate will equally be impacted,” Mehanti said.
PRODUCTION LOSSES
Analysts warned Pakistan may lose up to five million bales from this year’s 10.2 million bale production target, with overall output falling below last year’s seven million.
“The government’s target to produce 5.5 million bales in Punjab does not seem achievable now … cotton output may not exceed 4.5 million bales if flooding increases,” said Naseem Usman, chairman of the Karachi Cotton Brokers Forum.
Official data confirm the downturn. Pakistan’s cotton production as of Aug. 15 had already contracted by more than 17 percent to 887,401 bales, compared with 1.1 million a year earlier, according to a Sept. 2 report by the Pakistan Central Cotton Committee.
Usman said consumption would remain higher than domestic output, forcing Pakistan to rely heavily on imports that could exceed $2 billion, including raw cotton, seed and oil for animal feed.