PAKISTAN: Cotton shortage forces textile plant closures
More than 20 textile plants in Pakistan have closed down their operations since last one month due to shortages of raw cotton, high energy and raw material costs, and restrictions on the country's yarn exports.
Pakistan's textile industry annually consumes 2.7m tons of raw cotton, but last year raw cotton production in the country remained at 2.1m tons.
The shortage pushed cotton prices in the domestic market up by 90% from the start of the crop season in September last year.
Around 70% of the textile industry uses gas to generate its own electricity, while the remaining 30% (mostly in remote areas) run on electricity provided by the state-owned electricity company.
Self-generated electricity costs around 35% less than state's electricity.
Textile plants using state-owned electricity are becoming less competitive due to a further 6% increase in electricity tariffs and higher raw cotton prices.
Gohar Ejaz, chairman of the All Pakistan Textile Mills Association (APTMA) told just-style that the industry has been losing business to its global competitors due to a 15% duty on yarn exports and soaring raw cotton prices. He adds that textile mills are unable to import cotton at international prices.
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