Textile

Pakistan Textile Sector in 2012

The year 2012 has destined good news for textile and cotton industry of Pakistan because the research note of AKD Securities Ltd. says that the world’s renowned index of cotton i.e. Cotlook A index commit a breach level of $1/lb. In the same way, KCA cotton prices have illustrated some rising trend after a long time. With Rs 6,000 per maund, KCA is at high level (two months). Textile industry’s income continued to remain depressive throughout the first half of the fiscal year among severe energy crisis, lower cotton prices and higher global production. The situation was also provoked by chief exporting countries’ declined demand and weak international economic outlook.

Furthermore, the third largest producer of cotton in world, United States, is likely to drop production by 13.4% per annum which is 17.7 million tons; under the condition of severe drought in Texas. The current drought has caused a lot of damage and devastation in the United States of America’s largest region of cotton fields.

According to a research, the cotton import of China is predicted to rise by 34 % since the country plans to construct the national reserve whereas this reserve accretion is anticipated to support constraints mill use and prices. Accordingly, it could serve as the new breathing space for the ailing Pakistan’s industry of textile. The export patterns of textile and garment by Pakistan from 2001-2008 are shown in the graph below:

Hence, it could be anticipated that Pakistan’s revitalization in textile perimeters tied with limitation in the Pakistan’s currency could excite the earnings of the textile companies plus earnings of export in the financial year’s second half. Currently, Pakistan rupee is trading at its lowest level too, nevertheless, Pakistan currency’s existing situation bodes well for such companies that are export oriented as well as textile industry.

Conversely, in spite of the lower production of United States, it is...