By Raza Khan

ISLAMABAD, July 4 (INP-WealthPK): Growing volume of cotton yarn export from Pakistan is a worrying sign for textile industry as it is losing a precious material which can be converted into value-added products.

According to Pakistan Bureau of Statistics (PBS), the country exported cotton yarn worth $1.112 billion during first 11 months (July-May) of fiscal year 2021-22.

The volume of cotton yarn export is up by 24.18% during July-May FY22 as compared to the same period of FY21 when export volume was registered $896 million.

Total cotton yarn export in FY21 remained $1.016 billion with an addition of 3.26% against preceding year’s exports of $984 million. The data shows an increasing trend in cotton yarn export.

Mansoor Ahmed, a textile industry analyst, told WealthPK that export of cotton yarn is badly impacting the value-added textile industry. He said cotton yarn itself is an important raw material for several value-added products.

“We are losing textile exports worth billions of dollars by just exporting cotton yarn instead of using it for value addition,” Mansoor said.

He said that in February 2022, increase in exports of cotton yarn, cotton cloth, non-cotton yarn, and raw cotton resulted in decline of 10% in value-added sector.

“Cotton yarn export is a serious challenge faced by the value-added textile industry,” Mansoor said, adding that its greater outflow abroad with shortage at home is not good for local industry. “It will result in lower volume of value-added exports and hence less earning of foreign exchange and fewer profits for the industry,” he maintained.

Mansoor said that the reason for increase in cotton yarn exports is that it is fetching good price abroad following a decline in global cotton crop. “Cotton yarn exports can earn a little more than one billion dollars but value-added sector earns around four to five times higher if it is used for value-addition,” Mansoor added.

He said the government should impose export duty on cotton yarn. “The government should also set a maximum limit for cotton yarn export so that local industry can get benefit,” he suggested.

Value-added textile sector has repeatedly demanded an immediate ban on cotton yarn export and total elimination of the regulatory duty on import of raw material. The issue of cotton yarn export was raised before the relevant government quarters, but remains unresolved to date due to absence of clear policy.

On the other hand, All Pakistan Textile Mills Associations (APTMA) is also worried about the decline in cotton production in the country.

In a recent interview with WealthPK, Secretary General of APTMA Shahid Sattar stated that Pakistan was losing at least $5 billion directly on account of low production of cotton.

“Increase in cotton production will have a direct impact of $1 billion per one million bales and a seven times multiplier impact on the fiscal flows in the economy,” Sattar had stated.

He said that according to a research, overall cotton area in Pakistan declined by 33% from 2.9 million hectares to 1.9 million hectares during last decade.

“Cotton area in Punjab province has decreased by 50% from 2.53 million hectares in 2012 to 1.28 million hectares in 2022,” the APTMA secretary general informed.

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