The Pakistani Economic Observer (PEW) highlighted on Sunday that countries such as India have an oversupply of cotton and are actively exporting cotton yarn. In contrast, Pakistan faces a shortage of raw cotton and should avoid bulk exports of its cotton to preserve domestic textile production.
While the United States is a major exporter of yarn, this is largely due to its limited presence in value-added industries. On the other hand, Pakistan's garment sector employs around 3 million people, making it crucial for the country's economy. As a result, Pakistan can no longer afford to export raw materials like cotton or yarn without risking the long-term viability of its textile industry.
Dr. Murtaza Mughal, president of PEW, warned that competing nations are increasingly using imported yarn from Pakistan to undermine its position in the global apparel market. He pointed out that Pakistan holds a 1% share in the $396 billion global apparel trade and an impressive 30% share in the yarn market. While these figures reflect strong export performance, Dr. Mughal emphasized that relying heavily on yarn exports poses serious long-term risks.
He stressed the need to prevent new yarn factories from being established or existing ones from expanding their production capacity. This, he argued, is essential to achieving Pakistan’s target of $25 billion in textile exports by 2014.
According to Dr. Mughal, yarn exports generate only $2.20 per kilogram, whereas garment exports bring in $12 per kilogram. Despite this, Pakistan exports approximately 800 million tons of yarn annually, which is causing the country to be seen more as a supplier of raw materials rather than a manufacturer of finished goods. This trend is putting immense pressure on the garment industry, threatening jobs and leading to widespread unemployment in the sector.
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