Raw cotton arrivals in Pakistan surge around 50% in October's second half

Raw cotton arrivals in Pakistan saw a nearly 50% increase in the second half of October, raising hopes that total local lint production might reach the six million bales mark this season.

According to figures released by the Pakistan Cotton Ginners Association (PCGA), 1.19 million bales reached ginning factories during October 16-31, compared to 0.79 million bales during the same period last year.

Despite this boost, total cotton arrivals for the current year stand at 4.29 million bales, a sharp decline from the 6.79 million bales recorded by the same date last year, reflecting a 36.8% drop in output.

Punjab produced 1.84 million bales, down from 2.99 million bales last year, a 38.46% decrease. Sindh's output also fell from 3.79 million bales in 2023-24 to 2.24 million bales in 2024-25, a 35.5% decrease.

The unexpected increase in raw cotton arrivals has led to more ginning units becoming operational, with 560 units now functioning this season.

Exporters and traders bought 31,000 cotton bales, while the textile sector purchased a total of 3.53 million bales. As of October 31, 0.724 million bales remained unsold.

Read:How the 'gool' trade is fudging Pakistan's cotton production numbers

The cotton crop faces significant challenges due to climate change, extreme heat, torrential rains, pest attacks, an unorganized market system, exploitation of farmers by middlemen, and poor government support. Pakistan's Federal Committee on Agriculture had set a cotton production target of 10.8 million bales for the year, but the PCGA data suggests this target is unattainable, forcing the textile industry to rely heavily on imported cotton.

Reports indicate that cotton imports worth over $2 billion will be necessary, with textile mills already signing agreements to import three million bales. Analysts believe actual cotton arrivals might be higher than reported due to unregistered cotton trade, which has surged in the absence of a track-and-trace system, aimed at preventing evasion of heavy taxes imposed in the recent budget.

Recently, Finance Minister Muhammad Aurangzeb disclosed that total revenue leakage and evasion in Pakistan amounts to around PKR 7 trillion, with 50% attributed to sales tax evasion.