Cotton Industry of Pakistan

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Pakistan has the 26th largest economy in the world with a GDP of USD504.3 billion and a GDP per capita of USD 2,600. It has a population of approximately 176.2 million people (2008 estimates). OVERVIEW Pakistan is the 4th largest cotton producer and consumer (preceded by China (Mainland), India and the USA). The cotton industry is an integral aspect of the economy. This is also true of the textile sector on which the economy is heavily dependent. As such cotton is a principal crop. Mill consumption of cotton has increased from 1.3 million tons in 1990/91 to 2.6 million tons in 2007/08. ECONOMICS Production in 2007/08 totaled approximately 1.9 million tons, with an average yield of 620 kilograms/hectare. The cotton industry employs approximately 15 million people. Pakistan has been a net importer of cotton since the mid 1990s. This is due to expansion in domestic demand for cotton. Pakistani’s cotton exports have been below 65,000 tons for the past three seasons. The imports are significantly higher. Pakistan’s cotton imports have been increasing. Pakistan is currently the 2nd largest importer of cotton (behind China Mainland) with 880,000 tons in 2007/08. Pakistan imports a large amount of its cotton from the United States, specifically the Pima/Extra Long Staple cotton. In addition, in 2007/08, Pakistan imported significant quantities of short to medium staple cotton from India. Cotton imported from India is more cost effective since it’s cheaper to trade and transport over land than sea. Cotton trading is facilitated by the fact that the government has no quantitative restrictions or duties on imports and exports of cotton. The Pakistan economy is linked to the success of the cotton and textile sectors. They account for 8.2% of the value added in agriculture and 2% of GDP. Furthermore, the cotton and textile industries dominate exports, accounting for 55% of export value. The textile industry has been growing and is of considerable...
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