The already fragile Pakistan economy, hit hard by devastating floods, now faces the shutdown of textile mills as most of the cotton crop has been destroyed.
Cotton shortages has forced the owners to shut down factories after the floods. The mills closure underscores the challenges for the sector that is the largest manufacturing employer in the country and major exporter. The larger firms are less affected as they are well stocked. But the smaller factories (that are larger in number) exporting bedsheets and towels to the EU and the US are closing rapidly.
Exporters say there is shortage of good quality cotton, accompanied by high fuel costs and slow recovering from the buyers are the reasons behind these closures. They said larger firms supplying global brands Niki, Adidas AG, and others are well stocked and are less affected. The latest blow comes at a time when the country is facing high inflation and falling reserves.
Experts say this years’ cotton crop is expected to be 6.5 million bales of 170 kg each against the target of 11 million bales. This would force miller to import cotton worth $3 billion from Brazil, United States, Africa, and Afghanistan. The import from India is banned. However Indian mills are also short of cotton because of a bad crop this year.
