APTMA requests US for soft loans worth $2bn

January 16, 2023 (MLN): All Pakistan Textile Mills Association (APTMA) has requested for $2 billion soft loan to import 3.5 million US cotton bales.

APTMA wrote a request letter to the US Embassy Donald Bloome to take up the case of the US government to sanction loan.

In its letter the APTMA stated, "Pakistan domestic cotton production has declined to the historical low dropping 5mn bales for the current year mainly due to heavy rains and floods with estimated cotton production losses of more than $2bn."

Due to economic losses the domestic cotton production is significantly short than the textile sector requirements as textile industry of Pakistan consumed nearly 15mn bales of cotton last year, and the current season anticipated demand indicates that about 10mn bales will need to be imported.

In last year Pakistan imported 5mn bales of cotton worth $1.48bn with 1.7mn of those bales coming from the US, it added.

As of today, contracts for the import of 1.2mn bales of cotton from the US would be the main source of import for the current year.

However, because of the country's economic situation, there are difficulties in getting shipments cleared from the State Bank of Pakistan (SBP) which is also mentioned in the world market and trade report as maximum outstanding sales are from Pakistan, the APTMA noted.

Unfortunately, the import of cotton has been severely restricted in the country. Banks are not opening Letter of Credit (LCs) or retiring cotton imports through CAD.

Further it noted, "The industry is running out of cotton stocks and as a consequence, our mills have either shut down or will shut down in the very near future if decisive and urgent action is not taken."

“Therefore, we request the American Embassy to take up the case with the US government to sanction $2bn soft loan for the express purpose to import 3.5mn bales of cotton from US. Provision of this loan will ensure the employment of millions of workers and will improve Pakistan balance of payments”, it added.

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