The textile sector of Pakistan has not performed to its potential even though the country is the fifth largest producer of cotton in the world (relegated from fourth due to constant decline in yield). Its textile sector is losing the market to novices.
Still textile is the mainstay of the economy but its share in global textile trade remains either stagnant or declining. The sector is also the largest provider of employment in manufacturing. The uncertainty in textiles during the past five years is attributed by experts to a tangible lack of government and private sector interest.
The role of the textile sector in the economy within the economic strategy of the country seems to be wavering. The Ministry of Textiles, the government body responsible for its administration and curating the industry, has not performed as per its mandate in the past five years. Regrettably, even textile data posted on its website is obsolete and has not been updated for a long time.
The website still claims Razzaq Dawood as its adviser, who has long gone from the policy arena. The last tender dates floated by the ministry date back to 2019, and the events and expos highlight events held in 2018-2019.
The lack of prudence is not limited to the state only. The apex trade body the All Pakistan Textile Mills Association (APTMA), the body representing textile manufacturers in Pakistan, too, seems to be drifting, lacking vision and momentum to seize opportunities in the regional and global market space. A visit to their website reveals that the latest industry insights are from 2021, suggesting a detachment from current global textile trends and developments.
The increase in GST on Tier-1 retailers of textiles and leather products from 12 percent to 15 percent appears more of a move to gain revenues, rather than a strategic plan to bolster the textile industry. This impacts the competitiveness of the high-end textile products being produced at home as compared to the similar products available to the consumer from the grey channels.
The Textiles and Apparel Policy 2020-25, launched by the Ministry of Commerce, promises to boost value-added exports and make Pakistan a major player in the global textile supply chain. However, the document is brimming with ambitious targets, but without a concrete action plan on how to achieve them.
The statistics prove that the targets of the policy have not only been missed but there is a decline in performance. The exports of textile products posted a growth of 12.8 percent year-on-year to $4.4 billion in 2017-18, while the 2022-23 figures by the Economic Survey of Pakistan show a negative growth of 16.03 percent. This calls for strategic action, to save the industry from further decline.
The global shift from natural to man-made fibers in both consumption and production patterns is an undeniable reality that the Pakistani textile industry is yet to acknowledge and adapt to.
It is evident that in the textile industry, the potential is immense, but the will and vision must meet the understanding of the global shift in market dynamics and the innovation that can enable the possibilities. Despite the increasingly fluctuating global cotton market, the Pakistani cotton industry has showcased a relatively resilient performance.
The data for 2022/2023 indicates that cotton was grown in an area of 2.065 million hectares. This represents a slight decline from the 2.110 million hectares of the previous year. Despite the decrease in cultivation area, the yield per hectare stood at 404.61 kilograms, reflecting an improved yield compared to previous seasons.
Cotton production for 2022/2023 was recorded at 0.836 million tonnes. This figure shows a decline compared to the 1.265 million tonnes produced in the 2021/2022 season. The shift in production can be attributed to a variety of factors, including climate change effects, agricultural practices, and policy regulations.
Beginning stocks for the 2022/2023 season were 0.5 million tonnes, which when coupled with imports of 1 million tonnes, provided the cotton industry with a substantial volume for consumption and export. The total cotton consumption in Pakistan for the 2022/2023 season was high, reaching 1.9 million tonnes.
Despite the considerable consumption, Pakistan managed to export 0.009 million tonnes of cotton in the 2022/2023 season, slightly above the previous year’s export volume. By the end of the 2022/2023 season, ending stocks were at 0.427 million tonnes. The stocks-to-use ratio, a key indicator of market tightness, was recorded at 0.22 for the 2022/2023 season, suggesting a balance in the supply and demand scenario for the Pakistani cotton industry.
Pakistan needs to focus more on exploring new markets, increasing yield per hectare, and innovation to improve its share to be part of the global value and supply chain. The establishment of a Sustainable Textile Innovation Council (STIC) in Pakistan could be the catalyst needed to drive the industry toward a more sustainable and competitive future.
The mandate of the STIC will be different from the All-Pakistan Textile Mills Association (APTMA), the value proposition and policy focus would also differ in objectives and outcomes. Nowhere is this decision more critical than in the dynamic textile industry, where the winds of change constantly blow. To survive and thrive, textile businesses must wholeheartedly embrace innovation, break free from their traditional boundaries, and venture into uncharted territories.
To avoid a slow and gradual demise, textile businesses must foster a culture of innovation. Encouraging creativity, empowering employees, and seeking collaborations with startups and research institutions can inject fresh perspectives and ideas.
Need to exploit the actual textile potential of Pakistan
