Pakistan’s textile exports are not growing. Pakistan is the fourth largest cotton producer in the world after China, India and the US. Despite having this advantage, Pakistan has been unable to compete with Bangladesh, a country that imports almost 95 per cent of its cotton.
One of the biggest problems for Pakistan is that its annual cotton production has dropped from about 15 million bales to just 10 million bales. As a result, the country imports cotton and this increases the cost of production. The textile industry contributes about 60 per cent to Pakistan’s total exports.
China, the world’s largest apparel exporter, is facing problems due to rising labor wages. The rise in labor wages meant apparel manufacturing, a 80 billion dollar industry in China, could no longer be done cost effectively. The area was left vacant for Bangladesh, Pakistan and Vietnam, where wages are far lower than China’s. After China, only these three had the economies of scale and the idle labor capacity.
But much of the share has gone to Bangladesh and Vietnam. Ironically neither is a cotton producer, which Pakistan is. Nor do they have a large-scale upstream industry such as ginning, spinning, weaving and fabric processing, which Pakistan has.