Pakistan Textile Council (PTC) has sought immediate permission to import cotton from India to meet its raw material requirement and to avoid any balance of payments crisis after the recent floods devastated about 50% of the country’s cotton produce.

"Import of raw cotton from India must be immediately allowed to mitigate the raw material shortage," the PTC said in a statement, "The declining textile exports will lead to the balance of payment crisis, and the reduced productivity will put a lot of employees' jobs at stake, which the country cannot afford."

The country's textiles industry, which earned more than $19 billion in exports last year, was facing a shortage of raw material as the recent floods had damaged about half of the nation's cotton produce since June 2022, said the statement received by WealthPK.

The statement said the outlook for Brazil was also not very encouraging because the drought there had already dried up an estimated 200,000 tons of cotton supply.

All these factors are causing the price of cotton to increase in local and international markets, said the statement.

In fiscal year 2021-22, Pakistan's textile exports rose to an all-time high of $19.3 billion, but even achieving that mark would be a challenging task, given the unavailability of raw materials for factories, according to the statement.

The statement said that due to the unprecedented rainfall and floods, one-third of the country was submerged in water, thousands of homes were destroyed, more than 1,500 people lost their lives, and most importantly about 18,000 square kilometer of cropland was ruined, including about 45% of the cotton crop.

The council said that it was imperative for Pakistan to keep its export growth momentum to finance the import bill, keep the balance of payments situation manageable, and avoid default conditions.

The country would face a cost far greater than $10 billion in damages, with the loss of food crops alone amounting to about $2.3 billion, a particularly heavy burden at a time of rising food prices around the world.

Pakistan is a major producer of rice and cotton, and both crops have suffered severe damage.  As part of the devastation, flood damage will likely force Pakistan to increase cotton imports at a time when production in the US is expected to plunge by 28% due to drought.

Credit: Independent News Pakistan-WealthPk