KARACHI: Cotton production has seen a concerning decline of 34 percent, accompanied by a continued downward trend in cotton prices. A decrease in the spot rate has been observed, and business activities have become limited. International cotton prices have also experienced a decline.
The government is reviewing the issue of the textile sector’s EFS to find a resolution. To restore cotton production, the Prime Minister has formed a 15-member committee.
However, All Pakistan Textile Mills Association (APTMA) has submitted recommendations to the government for the improvement of the textile sector. Finance Minister Muhammad Aurangzeb has expressed the government’s firm commitment to providing all possible support to the textile industry.
In the local cotton market, the overall trend of declining cotton prices dominated last week. The negative effects of a significant drop in New York cotton futures prices are being felt in the local cotton market. Spinners are already inclined towards imported cotton, and only a few mills purchasing local cotton, mostly on credit. Ginners are facing difficulties as they have unsold stocks of cotton. APTMA has been continuously urging the government to resolve the EFS issue. Due to the EFS facility, cotton yarn and fabric are being imported in large quantities, severely impacting the local industry. There are speculations in certain quarters that the government allegedly is deliberately aiming to harm local textile industry.
However, according to some reports, the government is reviewing the issue of the textile sector’s EFS to find a resolution.
On the other hand, textile spinners are increasingly relying on imported cotton, severely impacting the ginning industry. The government has formed a dedicated committee for the revival of cotton, which includes experts from the textile and ginning industries. If the committee formulates a strategy effectively, develops a sound policy, and ensures its implementation, it can certainly bring significant benefits.
In the province of Sindh, the price of cotton is ranging from 16,000 to 17,500 rupees per maund based on quality and payment conditions, while in the province of Punjab it is ranging from 16,500 to 17,500 rupees. The Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by 200 rupees and closed it at 17,300 rupees per maund.
Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said that the international cotton market continues to experience a decline. New York cotton futures closed at a low of 63.50 cents per pound, the lowest level in the past four years. This downward trend in New York cotton is attributed to China, the largest buyer of American cotton, imposing a 15% tariff on American products. According to the USDA’s weekly export and sales report, sales for the 2024-25 season reached 241,500 bales. Vietnam remained at the top by purchasing 73,100 bales, China secured the second position with 46,800 bales, and Pakistan ranked third with 32,600 bales.
For the 2025-26 season, sales amounted to 105,600 bales, with Pakistan leading by purchasing 75,500 bales, Nicaragua securing the second position with 15,900 bales, and Turkey ranking third with 11,100 bales.
The cotton production in Pakistan has been under continuous pressure for several years, affecting not only the national economy but also exports, textile industry, and millions associated with agriculture.
According to a report by the Pakistan Cotton Ginners Association (PCGA) till February 28 they witnessed a significant decline, signalling a serious threat to the sector.
However, Sajid Mahmood, Head Transfer of Technology at Central Cotton Research Institute Multan while commenting on the report released on Monday said that this year, the total quantity of cotton arriving at factories was recorded at 5.524 million bales, a 34.17% decrease compared to last year’s 8.393 million bales. Key reasons for this sharp decline include climate change, reduced cultivation area, water scarcity, rising prices of agricultural inputs, and the absence of appropriate policies. This shortfall has not only created a raw material shortage for the domestic textile industry but is also expected to lead to historic increase in cotton imports. Sources indicate that cotton worth $5 billion will be imported this year, adding an extra burden on Pakistan’s economy.
Punjab, Pakistan’s largest cotton-producing province experienced a drastic decline this year. Last year, Punjab’s cotton production was 4.778 million bales, which dropped to 2.477 million bales this year, marking a 48.16% decrease. These statistics highlight the worsening challenges in cotton cultivation in the province.
Sindh also saw a reduced production, though the situation remains comparatively better than Punjab. Sindh’s output fell from 3.614 million bales last year to 3.046 million bales this year, a 15.71% decline. Balochistan’s production remained stable, with no major fluctuations observed.
Analysing cotton trade trends, the textile sector remained the largest buyer this year, purchasing 92.55% of the total cotton, while exporters and traders acquired only 46,700 bales. This reflects a decline in Pakistan’s exports and diminishing international demand for Pakistani cotton. Unsold stockpiles surged by 75.37%, indicating reduced domestic demand or market uncertainty.
Monthly arrivals also dropped significantly, from 43,537 bales last year to 13,852 bales this year—a trend signalling further future declines and raising concerns. The number of operational factories has decreased to 39, reflecting adverse impacts on the cotton ginning business.
A major factor behind Pakistan’s declining cotton production is the lack of investment in research and development (R&D) and policy gaps. Over the years, insufficient investment in cotton research and seed improvement has left farmers without access to modern technology and high-yield varieties.
Similarly, the absence of guaranteed support prices has driven farmers toward alternative crops, shrinking the area under cotton cultivation.
Reviving Pakistan’s cotton sector demands immediate action. Policymakers must incentivise cotton growers, formulate integrated policies to address water scarcity, and strengthen R&D by merging institutions like the Pakistan Central Cotton Committee with the Pakistan Agricultural Research Council to establish a unified cotton wing.
Additionally, announcing a support price for cotton is critical to ensuring farmers’ profitability and encouraging them to return to cotton cultivation. Export promotion measures are also needed to enhance Pakistani cotton’s global market position.
The current situation underscores that without urgent, effective interventions, cotton production may decline further in coming years, severely impacting not only the textile industry but the entire economy. A comprehensive, long-term policy is essential for reviving cotton production, and practical steps must be taken immediately to rescue this sector from crisis.
Meanwhile, Prime Minister Shehbaz Sharif, taking notice of the declining cotton production, has formed a 15-member committee that will recommend measures for the crop’s restoration within 30 days. Federal Minister for National Food Security and Research Rana Tanveer Hussain has been appointed as the convener of the committee, which will review the situation of the cotton crop and propose policy and administrative interventions for its revival.
The committee will also make recommendations for the proper grading of cotton bales according to international standards, particularly pollution parameters, and for ensuring they meet quality standards. Additionally, the committee will provide technical suggestions to increase cotton production across the country.
However, Finance Minister Muhammad Aurangzeb has expressed the government’s firm commitment to providing all possible support to the textile sector. He reiterated this commitment during a meeting with the leadership of APTMA in Islamabad on Thursday.
The Finance Minister reaffirmed the government’s resolve to address key issues related to taxation, energy, and finance to ensure long-term stability and future growth in Pakistan’s industrial sector.
Welcoming the APTMA officials, he assured the delegation that the government recognises the critical role of the textile industry in the national economy and is determined to address its concerns. Earlier, the APTMA delegation, led by Chairman Kamran Arshad, presented a detailed briefing on several important issues related to energy, taxation, and finance affecting the textile sector.
Additionally, the first meeting of the committee formed to review the Export Facilitation Scheme (EFS) on the directives of the Prime Minister was held under the chairmanship of Federal Minister for Planning and Special Initiatives Ahsan Iqbal, along with Federal Minister for Trade Jam Kamal Khan.
It was attended by the Secretary of Commerce, the Chief Economist of the Planning Commission, representatives of the Federal Board of Revenue (FBR), and senior officials from relevant ministries.
More than 60 representatives from the business community participated in the detailed consultative session with government officials via video link. The FBR briefed the committee on the EFS, its recent amendments, and areas where misuse has been identified.
