ISLAMABAD: Pakistan’s textile manufacturers warn cotton imports could surge to $3bn, two times higher than last year, after devastating floods wiped out key growing areas in Punjab and now threaten Sindh, industry officials and analysts said.
The monsoon downpours have already swamped central Punjab, the country’s agricultural heartland, and are pushing south into Sindh, Pakistan’s second-largest cotton belt. Analysts say the damage could further weaken production in the days ahead.
Agriculture contributes nearly a quarter of Pakistan’s GDP and employs almost half the labour force, according to official data, making the sector particularly vulnerable to climate shocks.
Crisis’ for farmers and millers
“Probably, our cotton import can exceed $2.5 to $3 billion this year alone,” Kamran Arshad, chairman of the All-Pakistan Textile Mills Association (APTMA) told Arab News. He noted millers imported $1.5 billion worth of cotton last year from Brazil, the United States, Africa and Australia.
Arshad said central Punjab’s cotton-growing districts — including Vehari, Mailsi, Chichawatni and Burewala — had been “negatively affected”, with even genetically modified Bt cotton crops submerged.
“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 restrict luxury imports to conserve foreign exchange.
Blame on Indian water releases
Arshad also accused India of worsening the disaster by releasing record amounts of water from upstream dams. Under the 1960 Indus Waters Treaty, India controls the eastern rivers but must notify Pakistan of discharges that could cause downstream flooding.
Flood damage has undermined growth projections for Pakistan’s textile exports, the country’s top foreign currency earner, which brought in $18 billion last year.
$6bn hit to the industry
“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,” Ahsan Mehanti, chief executive of Arif Habib Commodities, told Arab News.
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 warned.
Production losses mount
Analysts said Pakistan could lose up to five million bales from this year’s 10.2 million bale production target, with output potentially 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 figures confirm the downturn: cotton production as of August 15 had already shrunk more than 17 percent to 887,401 bales compared with 1.1 million last year, according to a September 2 report by the Pakistan Central Cotton Committee.
Usman said domestic consumption will remain above production levels, forcing Pakistan to rely heavily on imports. “Cotton imports, including raw cotton, seed and oil for animal feed, could easily exceed $2 billion,” he added.
