Textile factories close down due to cotton shortage, the country to import cotton
The recent floods destroyed about 35% of the cotton crop and killed more than 1,500 people.
Pakistan’s small textile factories making towels and bedsheets have started to shut down following the flash flooding that destroyed the cotton crop. These factories exported cotton to Europe and US.
Pakistan Textile Exporters Association’s patron-in-chief Khurram Mukhtar has claimed that high fuel costs, poor recovery of payments from buyers and a scarcity of good quality cotton are the key reasons behind the closing of factories, as reported by a local media source.
He further said that the larger firms which supply global companies like Puma SE, Adidas AG, Target Corp and Nike are stocked. This is why, they aren’t impacted as much as the smaller companies.
The closure of mills is likely to cause serious implications on a sector that accounts for about 8% of the economy, employs more than 9 million people and adds more than half percentage to the country’s export earnings. The recent floods destroyed about 35% of the cotton crop and killed more than 1,500 people. The massive destruction that the floods have caused is creating acute problems.
The closing of mills like Shams Textile Mills Ltd, JA Textile Mills Ltd, Asim Textile Mills Ltd and AN Textile Mills Ltd is likely to worsen the country’s employment rates and also negatively influence the export earnings. On the other hand, the larger companies are also struggling as their products are falling about 10% by December from now because of a slowdown in US and Europe.
Khurram further stated that cotton production in Pakistan could slump to about 6.5 million bales in the year that begun in July as compared to a target of 11 million. This could cause Pakistan to import cotton from different countries like Turkey, US, Brazil, East and West Africa and Afghanistan as claimed by patron-in-chief of All Pakistan Textile Mills Association.
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