Pakistan’s textile companies that produce bedsheets and towels for the global market are ceasing production due to a lack of raw materials after rains decimated the cotton crop.
Khurram Mukhtar, patron-in-chief of the Pakistan Textile Exporters Association (PTEA), as many as 100 smaller mills have ceased operations due to a lack of excellent quality cotton, rising fuel prices, and poor recovery of payments from customers in flood-affected areas.
Larger exporters, who supply products to well-known brands like Nike Inc., Adidas AG, Puma SE, and Target Corp., are less impacted since they have enough inventory on hand, he added.
The discovery comes as extensive areas of agricultural land in the north and south of the country, particularly in Sindh and Balochistan, were ravaged by flash floods brought on by record monsoon rains and glacier melt, wiping out whole crops, including cotton.
According to the most recent biweekly statistics, which was issued on Monday by the Pakistan Cotton Ginner’s Association (PCGA), the destruction caused cotton arrival to decline 24% year over year. The hardest-hit province, Sindh, recorded a significant 41% reduction in cotton arrival.
The All Pakistan Textile Mills Association (APTMA) projected cotton losses last month due to rain and flooding in the nation at 3.5 million bales, 36% of the crop, or $1.5 billion in output losses.
According to the Bloomberg article, the country’s employment crisis could get worse and its exports could suffer from the closure of textile mills such AN Textile Mills Ltd., Shams Textile Mills Ltd., J.A. Textile Mills Ltd., and Asim Textile Mills Ltd.
Additionally, Mukhtar noted that the prolonged economic recession in the West is hurting prospects for bigger businesses, with demand for their goods falling by around 10% by December.
According to a PTEA official, Pakistan’s current fiscal year cotton production may only reach 6.5 million bales, well below the objective of 11 million bales.
According to Gohar Ejaz, patron-in-chief of APTMA, the decline in production would force the cash-strapped South Asian nation to spend roughly $3 billion on cotton imports from other countries.
Pakistan is on the verge of a serious crisis as a result of the trend, where a ballooning import bill has put tremendous pressure on the country’s currency, which has lost over 22% of its value this year.
