By Arsalan Ali ISLAMABAD, May 23 (INP WealthPK): Pakistan has strong export potential in the textile sector, making it a viable solution for economic stability. Productivity of the textile sector is affected mainly by the acquisition of raw materials and energy tariffs. Dr. Abedullah, Chief of Research at Pakistan Institute of Development Economics (PIDE), told WealthPK that contamination in hand-picked cotton is a persistent issue concerning the quality and value of the commodity. He said that untrained cotton pickers from field to low ginned quality standards contribute to cotton fetching lower value in the market. He said that Pakistani ginned bales contain 8-10% trash, whereas the global average is only 2-3%. He said poor quality cotton in terms of properties not only raises processing costs, but also reduces output and final product quality. Abedullah said the cultivated area of cotton in Pakistan has decreased, while the crop is more prone to plant disease and pest attacks. “Cotton area in Pakistan has declined from 2.9 million hectares to 1.9 million hectares,” he added. He said that due to climate change and more pest attacks, the farmers have to use more pesticides which increases the input cost. He said farmers' shift to other crops, which are profitable, is a hurdle to the growth of the textile sector. While talking to WealthPK, Dr. Ghulam Ghouse, Assistant Professor at the University of Lahore, said power and energy are the major components in the conversion cost of spinning and weaving. He said energy tariffs affect the relative competitiveness of products in the international market. Dr. Ghouse said the cost of power and fuels that the unit is bearing during the conversion process affects the price of the final goods. He said electricity tariff above 7.5 cents/kWh and along with $6.5/mmbtu for gas/RLNG is not competitive. Dr. Ghouse said growth in the textile industry has been steadily increasing due to the export-driven growth strategy adopted by the governments during the pandemic. He mentioned that industries of India and Bangladesh were shut down while the demand for textiles was increasing in the world due to which global brands including Target Corp. and Hanes brands Inc. turned to Pakistan and there was extraordinary growth in the Pakistani textile industry. “If this industry grows continuously according to its potential, then one day Pakistan will become the largest exporter of textiles in the world,” he added. According to Trade Development Authority of Pakistan (TDAP), on February 15, 2022, the government approved the third Textile and Apparel Policy, which preserved existing tax rebates, energy subsidies, and credit programs through 2025. The government also retained existing tax provisions and provided "regionally competitive energy rates" through 2025. The sector continues to receive a share of government export sector subsidies, access to cheap credit, and long-term capital expenditure for working capital, including subsidized energy, and duty drawback concessions will help boost the exports of the textile sector. To boost the textile sector, the government should take measures to increase cotton production by providing incentives (credit loans and provision of high-quality seeds) to farmers to increase their productivity and cultivate areas. Training and modern equipment should be provided for farmers to increase the production of crops. To ensure the sector's continued success, the government must ensure uninterrupted and regionally competitive gas and electricity supply for the entire value chain.