The United States Department of Agriculture (USDA) forecasts that Pakistan’s cotton imports are forecast at a record 5.3 million bales and are expected to exceed domestic production for the first time.
Significantly lower domestic supplies have driven imports to a second consecutive record needed to support higher consumption. Successive year shortfalls in domestic production have depleted supplies significantly. The 2019/20 Pakistan harvest was the lowest in over three decades, and the 2020/21 crop is down 27 percent.
Back-to-back declines have propelled imports, supplied mainly by Brazil and the United States. Historically, India was a significant supplier to Pakistan. However, after a 2019 border closure between the two countries, Pakistan’s mills have been barred from importing the world’s lowest-priced cotton. With India as the world’s largest cotton yarn exporter, Pakistan’s cotton importers and Yarn Merchants Association have requested that the government allow trade.
Despite no official direct access to India’s competitively priced supplies, imports are nonetheless projected at a record to support a recovering textile and garment sector.
COVID-19 significantly lowered global demand for cotton yarn, fabric, and products in 2019/20. In the first eight months of Pakistan’s fiscal year (July 2020 – February 2021), the country recorded larger export values of knitwear, bedwear, towels, and readymade garment (RMG) compared with the previous year
Pakistan’s more robust exports of textiles and garments are expected to support record 2020/21 cotton imports. The country’s cotton supply chain is essential to its economic recovery from COVID-19; textiles and garments are the largest export revenue source and comprise 46pc of Pakistan’s manufacturing sector and 40pc of the total labor force.
