Cotton scarcity and restrictions on opening Letters of Credit (LCs) for imports have harmed the textile industry’s exports, resulting in widespread unemployment.
The All Pakistan Textile Mills Association (APTMA) recently raised the issue in a letter to State Bank of Pakistan (SBP) Governor Jameel Ahmad. The textile industry is on the verge of default, according to the association, because production and earnings were far below potential.
The Association voiced alarm that the industry’s closure would result in the layoff of more than 10 million people and a loss of more than $10 billion in annual export revenue.
It further mentioned that due to last year’s floods and heavy rains, local cotton production has remained at less than 5 million bales in the current season.
The APTMA wrote, “The textile sector is closed in the current unfavorable conditions. Consequently, there will be massive unemployment in the country,” adding that “the textile industry will have to import at least one million bales of cotton to meet its requirement. However, banks were not opening LCs for import of the required quantity of cotton”.
The Association has warned that mills are running out of cotton stocks and the industry would be forced to suspend production due to a lack of raw materials. It has urged the SBP governor to open LCs for cotton imports, citing the fact that import consignments were stuck at ports and needed to be released as soon as possible.
