What was slated to be a year of opportunity for Pakistan’s cotton importers (read spinners) may fast turn into a missed window. Although textile exporters insist that it will be long before major buyer destinations reopen and demand resurges, international cotton prices are already back to pre-lockdown levels of December 2019.
That means Pakistan’s textile sector needs to make some quick decisions. A double-digit month-on-month slowdown in textile exports – both in volume and value terms - between July and August lends credence to the theory that the volatility in export destinations markets shall continue as the northern hemisphere braces for a second wave of COVID cases followed by another round of lockdowns.
Yet, damage to domestic crop last season - amid conflicting reporting by governmental departments leading to several downward revisions of output from 12.5 million bales to eventual 7.5 million bales - has hurt confidence of value adding industry in reliability of local cotton estimates. While Pakistan was saved in nick of time from highest ever cotton import bill due to COVID-19, 2020-21 may prove to be drastically different.