Insufficient cotton in Pakistan should not expand yarn exports

The Pakistani Economic Observer (PEW) highlighted on Sunday that countries such as India possess surplus cotton and are capable of exporting cotton yarn. In contrast, Pakistan faces a shortage of cotton and should avoid bulk exports of the raw material.

The United States, despite being a major exporter of yarn, does so largely due to the absence of high-value manufacturing industries within its borders. Meanwhile, in countries like Pakistan, where approximately 3 million people are employed in the garment sector, continuing to export cotton or yarn would jeopardize the domestic textile industry.

Dr. Murtaza Mughal, president of PEW, warned that competing nations are increasingly using imported Pakistani yarn to gradually push Pakistani garments out of global markets.

He pointed out that Pakistan currently holds a 1% share in the $396 billion global apparel trade, but its dominance in the yarn market is significantly higher, at around 30%. While this situation generates revenue, it poses long-term risks.

According to Dr. Mughal, Pakistan must refrain from constructing new yarn factories or expanding existing ones. This approach, he argued, is essential to meeting the country’s target of achieving $25 billion in textile exports by 2014.

He emphasized that while yarn exports bring in about $2.20 per kilogram, garment exports yield up to $12 per kilogram. Yet, Pakistan continues to export roughly 800 million tons of yarn annually. This trend is transforming the country into a supplier of raw materials rather than a competitive player in finished goods, ultimately threatening the garment industry and causing widespread job losses.

With the global market becoming more competitive and shifting toward value-added products, Pakistan needs to rethink its strategy. Focusing on higher-value textile production could help preserve jobs and boost economic growth in the long run.