Pakistan: Epidemic Situation May Lead To Insufficient Supply Of Cotton

According to the statistics of Pakistan Bureau, as of February 2020, cotton imports in Pakistan reached a record high of 1 million 380 thousand packs this year.

According to the current import volume plus the output of 8 million 600 thousand bales, the total supply of cotton in Pakistan is close to 10 million packages. The Pakistan textile mill has 1 million 250 thousand cotton bags per month, and the total supply is less than 8 months in the domestic market. The supply gap is 5 million packs. It is necessary to import -6 in March this year.

According to the statistics of Pakistan Bureau of statistics, in February this year, the average price of cotton imports in Pakistan was 1.65 US dollars per kilogram, and the international cotton price was at least 10 cents higher. The importers ordered a large quantity of orders as early as last August when the price was only 1.4 US dollars / kg, and the actual bare price of cotton was far below 1.65 US dollars / kg as the price of the Bureau included freight and insurance.

According to the data of Pakistan ginning factory Association, the inventory of unsold cotton in March 20th was only 600 thousand bales. In February, imports would be increased to two times, but less than one month's demand. If the import is carried out according to the plan, there will be no problem with the supply of cotton, but the supply of cotton will become a problem due to the slow down of logistics due to the new crown.

If the situation continues after March, the situation of insufficient supply will become increasingly prominent, because insufficient inventory may force the mills to cancel orders, thus bringing a very negative Domino effect to the resurgence of Pakistan's textile exports.