Pakistan's cotton production falls to lowest in 4 decades

Cotton production in Pakistan amounted to 5.5 million bales this season — the second lowest output recorded in the last four decades — with arrivals showing 51% decline from the estimates projected at the beginning of the season.

According to the Pakistan Ginners Association, cotton arrivals registered a 34% decline from the preceding year's production of 8.393 million bales.

A leading cotton expert said that there was a possibility the Pakistan Ginners Association data has been under-reported because of higher taxation slab on the local inputs.

He added that there was a possibility that growers under-reported some 1.5-2 million bales during the season because of higher taxation.

There is an 18% tax on selling of the local output whereas if the same has been imported, it is duty free. Moreover, there is an 18% tax if the cotton is spun into yarn whereas if imported, it is again duty free.

This heavy taxation might have forced growers and ginners to under-report the actual production of cotton which would certainly dent the overall economic growth or GDP of the country, he said.

The cotton expert said that to increase local output, the government should provide a level-playing field. Its main concern should be to reduce dependence on imports and saving valuable foreign exchange by exempting sales tax from local farm products, the expert said.

The exemption has sped up the imports of cotton bales to fulfil local demand, he said.

The continuous decline in cotton production has accelerated the import of the commodity. In the seven months of the current fiscal year, cotton shipments rose sharply by 194% to $612 million compared with $208 million imported in the same period last year, according to the data of Pakistan Bureau of Statistics.

“With the slightly better harvest in the previous season, imports had fallen in the fiscal year ended June 30, 2024, where shipments amounted to $448 million compared with $1.68 billion imported during the preceding year,” the cotton expert said.

Out of total production of 5.524 million bales, Sindh's production for the first time surpassed the output of Punjab. Production in Sindh amounted to 2.806 million bales while in Punjab it was 2.717 million bales, down by 34% and 36%, respectively.

Textile mills bought 5.112 million bales during the season compared with 7.892 million bales of the corresponding season, the report of Pakistan Ginners Association said.