As Drought Shrivels Crop, Pakistan Cotton Industry Faces US$ 4 bln bill

Market News

As Drought Shrivels Crop, Pakistan Cotton Industry Faces US$ 4 bln bill

Pakistan is spending US$ 4 billion a year on cotton imports to support its ailing textile industry, after erratic rainfall and drought in the country's cotton fields slammed growers and the country's economy, officials say. Bad weather has hurt both the quality and quantity of cotton harvested, leaving the country's textile producers - who account for almost 9% of GDP - struggling as they face lack of supply and higher prices for imports, they say. "We are importing cotton from India and some other countries to fulfill our demand and this has increased to 20% in just six months," said Mehmood Aslam, operations manager at Fazal Group, one of the oldest and largest textile groups in Pakistan, with operations in cotton ginning, yarn & fabric manufacturing. He said turning to imports had led to a rise of up to 30% in the cost of the company's raw materials and hit the company's profits. The quality of the Pakistani cotton still available also is declining as a result of the poor conditions, he said. "The local cotton contains a lot of trash and other contaminations due to the extreme weather conditions. Therefore its ginning yield has fallen and production costs have escalated," he said.

He said problems sourcing good quality cotton and ongoing energy shortages in Pakistan had reduced his company's exports of finished textiles from more than 100 shipping containers a month over much of the last two years to about 30 containers today. "We can't meet the deadline of 30 days to deliver our orders and the majority of our clients have turned to India, Bangladesh and China to get their orders done in time," he said. He urged the government to offer reductions in sales tax to help the struggling industry.

NEW SEEDS, LESS WATER

To deal with worsening drought and falling cotton harvests, Pakistani scientists at the Central Cotton Research Institute are developing 45 new drought-tolerant and heat-resistant cotton seed varieties with the help of private seed companies. The aim is to not only keep up cotton production but to reduce the amount of irrigation water needed to grow cotton. Khalid Mahmood, director of the Cotton Research Institute Faisalabad, said the new seed varieties have been planted at 22 locations in Punjab and Sindh provinces on a trial basis. Trials will continue another two years, he said, then the seeds are expected to come onto the market once they are approved by the Punjab Seed Corporation. He said the varieties in trials are producing 40 maund of cotton per acre-at least a third higher than normal cotton harvests-and cutting water use by 30%. "So far, we are satisfied with the outcome," he said.