Deficit in cotton production to affect textile sector

30 Nov '10

2 min read

The projected 20 percent deficit in Pakistan's total cotton production during the crop season of 2010-11 is expected to be at about 2.3 million bales. This is expected to put a financial burden on the textile value chain of the country.

A series of factors have already led the local and the global textile sector into trouble, as the anticipated demand for cotton is very high in several countries whereas the expected cotton produce is comparatively low. This has influenced the cotton prices in the recent months.

The lint production at Pakistan was at 12.8 million bales during the previous cropping season of 2009-10 but the local demand stood at 14.9 million bales.

The deficit of 2 million bales was fulfilled by means of imports for which the textile industry had to undergo a financial burden of over $5 billion.

The enforcement of the RGST is likely to increase the load on textile and spinning sector of Pakistan.

Since the Indian cotton exporters have declined to fulfill the commitment made by the cotton importers of Pakistan and there are reports on further imposition of taxes on the cotton sector, therefore the financial burden is unavoidable.

India's decision to prohibit the cotton export has been seriously influencing the international textile sector.

The hike in cotton prices is not strange if it is caused by the interplay of the market forces and is governed by the global rules and regulations.

Fibre2fashion News Desk-India

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