According to the latest biweekly data released by the Pakistan Cotton Ginner’s Association (PCGA) on Friday, there was a substantial 48% surge in cotton arrivals in Pakistan on August 15 when compared to August 1.
The aggregate cotton arrival in Pakistan climbed to 2.12 million bales as of August 15, in contrast to the 1.43 million bales registered on August 1, 2023. This translates to an increase of 0.69 million bales. It’s important to note that a year-on-year comparison isn’t feasible as data was not collected on August 1, 2022, as per PCGA.
Last year, devastating flash floods wreaked havoc on extensive agricultural land in Pakistan, particularly in Sindh and Balochistan. The marked improvement in cotton arrivals, a crucial raw material for the textile sector, is a welcome development for Pakistan, which is currently facing financial challenges.
According to the PCGA data, the increase in cotton arrival was notably prominent in Punjab. As of August 15, cotton arrival in Punjab reached 0.64 million bales, compared to 0.39 million bales on August 1, 2023, signifying a substantial 64% rise. Similarly, cotton arrival in Sindh amounted to 1.48 million bales, surpassing the 1.04 million bales recorded on August 1, thus marking an increment of 0.44 million bales or 42%.
Amid this, Pakistan’s textile sector exports endured a decline of 15%, settling at $1.31 billion during July 2023, in comparison to the $1.54 billion achieved in the corresponding period of the prior year. Earlier this week, the All Pakistan Textile Mills Association (APTMA) cautioned that the textile sector would continue to confront economic challenges stemming from factors such as high-interest rates, currency depreciation, elevated power tariffs, rising raw material costs, and the suspension of the zero-rating status for fiscal year 2024.
APTMA indicated that the gradual transition to a market-based exchange rate might lead to another round of currency depreciation. Although the rupee initially appreciated following the IMF SBA, this outcome was influenced by an increase in market confidence and the depreciation of the US dollar. Nonetheless, recent trends show a decline in the rupee’s value, which concluded at 295.78 in the inter-bank market on Friday.