Textile sector investment in rapid decline


The textile and clothing industry has consistently contributed more than half of Pakistan’s exports from 2001 to 2010. Yet, investment in the textile sector has shown a rapid decline, adversely impacting on the future prospects of the textile sector.
This regression has been mainly due to the declining production of raw cotton domestically and record high international cotton prices, disclosed the Brief 42 of Global Status of Commercialised Biotech/GM Crops:2010 released by the International Service for the Acquisition of Agri-biotech Applications (ISAAA) on Saturday.
Pakistan was a net cotton exporter in the early nineties but is now a major importer of cotton to meet the growing demand of Pakistan’s domestic cotton based industry.
Over the last five years, Pakistan has been importing three to five million bales of cotton each year which increases the pressure on the national exchequer which further widens the trade deficit. In contrast to the situation in Pakistan, the top three cotton producers in the world, China, India and USA have substantially increased cotton yield over the same period outstripping others including Pakistan in the world cotton market.
For instance, India has doubled its cotton production from 13 million bales in 2001 to 30 million bales in 2010, the report underlined. It is noteworthy that all three lead cotton countries have successfully deployed biotech cotton varieties and hybrids which build resistance to major insect pests and tolerance to herbicides thus benefiting from cost effective and efficient management of insect pest and weed control.
It is also pertinent to mention that the All Pakistan Textile Mills Association (APTMA) estimated that the textile industry’s raw cotton requirements would be 20.1 million bales by 2015 comprising 66 percent of medium staple, 26 percent long staple and eight percent of extra long staple cotton.
To meet these needs, ‘Cotton Vision 2015’ of the government concluded that this increased demand would require five percent rise in cotton acreage in Balochistan and in the Khyber Pakhtoonkhwa (KPK), an annual average of five percent increase in yield, introduction of CLCV resistant Bt cotton varieties and hybrids, and a strengthening of research and the capacity of cotton institutes in Pakistan.
In 2005-06, the federal government launched an ambitious plan to enhance cotton production to 20.7 million bales by 2015— a 60 percent increase over 2005-06 production, however actual production has dropped from 14 million bales in 2005/6 to a low of 12 million bales in 2009-10. In 2009-10, cotton remained the second major contributor and accounts for nine percent of the value- added in agriculture and combined with textile industry, it makes up about nine percent of the country’s GDP.
At the national level, the performance of cotton crop is a significant influence on the national GDP growth with a shift in the production of cotton crop exerting a substantially disproportionate effect of two to eight percent on the growth of GDR Cotton which is a multipurpose crop (fiber, oil and animal feed) and the single largest source of raw material for the textile industry in Pakistan which has been the main driver of the national economy for the last 50 years in terms of foreign currency earnings and job creation.
The Economic Survey 2009 stresses that in view of new emerging opportunities the government unveiled a new textiles policy 2009-2014 to boost textile export to $25 billion.