Pakistan''s exports of cotton yarns are now sharply falling, reflecting increasing difficulties on foreign markets after domestic and international cotton prices rebounded in the past financial year. Pakistan''s cotton yarn exports were down nearly 18% in value terms in July at US$66 million, actually falling more than 25% in volume terms at 36,000 tons.

Confronted with a substantial increase in raw material costs, Pakistani exporters met difficulties in passing them to their customers in the Far East. Average unit value of exported cotton yarns rose from US$1.68 per kilo up to US$1.84 per kilo, an increase of nearly 10%. Specialised in sales of low-priced products, Pakistani exporters were confronted with a slowdown in Asian textile markets in addition.

With China expanding its yarn capacities, Pakistan faces increasing competition from the PRC on the international market. In addition, Pakistan''s official policy consists in exporting more value-added and finished products, to the detriment of sales of cotton  yarns to foreign countries.  Domestic production of cotton yarns is now clearly focusing on domestic market as a result, with cotton yarn output and cotton consumption sharply rising although exports are falling. As a consequence, Pakistan is no more able covering its cotton needs with its consumption exceeding domestic output.