Pakistan Floods Severely Damage Cotton Crop
August 19, 2010 More than 15 percent of Pakistan’s current cotton crop has been destroyed by severe rains and flooding, introducing a high level of uncertainty about the nation’s plans for export shipments. Roughly 2.3 million bales of the crop, which was expected to reach 15 million bales, have already been damaged.
The Pakistani spinning sector was gearing up to begin operating at full capacity, both because the domestic crop was expected to be good and because neighboring India’s restrictions on cotton exports were expected to be lifted (India’s government did, in fact, announce the end of export restrictions beginning October 1). The flooding has hampered those plans not only by destroying so much of the domestic production, but also by blocking supply lines. Even when raw cotton is available, transporting it from ginners to spinners is difficult at some times and impossible at others due to water-blocked roads.
Earlier this year, Pakistan established a quota (and later imposed a tax) on cotton yarn exports, so spinners have been reluctant to pay the high price of importing cotton when they might be forced to sell their yarn to the domestic textile industry at low prices. Those factors now leave spinners with virtually no available stocks.
Growers and government officials are doing what they can to minimize the crop damage, such as spraying pesticides in fields as soon as the waters recede to protect against insects and viruses. Nonetheless, it’s estimated that the local textile industry will need to import cotton from the United States, India and Brazil to meet its needs, at a cost of more than US$900 million.
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