Raw cotton exports increase 142%

Faseeh Mangi May 07, 2010

KARACHI: Raw cotton exports to 142 per cent increased due to higher international demand and the rupee depreciating 6.5 per cent against the dollar this year.

Revenue earned from raw cotton exports are $193 million for the first nine months of fiscal year 2010, according to BMA Capital. Most of the export growth was in the raw product as value added side did not perform well. Exports of knitwear and bedwear dropped two and one percent respectively.


The value added sector had been crying for imposition of ban on exports of cotton yarn in a situation where its exports increased 29 per cent. The pressure from the value-added sector resulted in Ministry of Textile to restrict exports of yarn to 50,000 tons a month in January 2010, followed by a further reduction in it to 35,000 tons a month. Value added sector’s main aim was to bring down the cotton price but this came back to haunt them, said Chairman, All Pakistan Textile Mills Association, Anwer Ahmed Tata.

Cotton prices in the local market have currently shot up to over Rs6,700 per maund this year from Rs3,400 per maund in fiscal year 2009. Cotton prices rose to an alltime high of Rs6,900 amidst greater demand, decline in global production and the recent ban on raw cotton exports from India on Tuesday. High raw cotton prices lead to lower profits for the value added sector.

Production up

Pakistan produced 12.69 million bales of cotton in the current season, which is 12 per cent higher than last year, said BMA Capital analyst Sana Bawani in her research report. In the same time world cotton production fell five per cent lower, which increased demand of the local commodity. The textile sector’s export receipts witnessed an increase of 6 per cent this year. Textile exports contributed to more than half of the total export revenue during first nine months of the current year.


International Cotton Advisory Committee (ICAC) estimates global cotton production in the coming season to increase 13 per cent in reaction to surging prices triggered by the demand. Its projection for the world cotton crop from Aug 10 through Jul 11 this year is expected to climb to 19.4 million tons from 19 million tons in the previous season with a continued uptrend in cotton consumption.

Pakistan being the fourth largest producer of cotton in the world also plans to expand its acreage of the crop in the next season and benefit from higher exports in the coming fiscal year. Introduction of Bt cotton in the country would also help to contribute towards increasing yields and farm income in the country.