LAHORE: According to the cotton statistics released by the Pakistan Cotton Ginners Association (PCGA) as of November 30, 2024, the total cotton arrivals in Pakistan this year was 5,190,725 bales, representing a decline of approximately 33.06% compared to 7,753,473 bales in 2023. A provincial breakdown reveals that Punjab’s total cotton arrival for 2024 was 2,459,684 bales, showing a 34.19% decrease from 3,736,749 bales in 2023. Similarly, Sindh’s cotton arrival in 2024 was 2,731,041 bales, down by 32.01% from 4,016,724 bales last year.
In Balochistan, cotton arrivals for 2024 were restricted to 155,800 bales. Furthermore, as of 2024, 406 ginning factories are operational across the country. These figures indicate a significant and concerning decline in both cotton production and arrivals in Pakistan, which poses a major challenge to the agricultural sector.
Head Department of Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood said not long ago, Pakistan ranked as the fifth-largest cotton producer globally. However, due to various factors, including ineffective policies, cotton production has consistently decreased. Today, Pakistan is ranked seventh in cotton production, and if current trends continue, it is projected to fall to eighth place. This is a critical moment for immediate intervention to increase and restore cotton production. The issue cannot be resolved through conferences, speeches, committee formations, or colorful presentations alone. Instead, tangible, research-driven actions are required that align with ground realities to genuinely improve cotton production and research.
PCGA data indicates decline in cotton production
One crucial step towards addressing this issue is the establishment of a minimum support price of 10,000 rupees per maund, set at least one month before the cotton sowing season. This measure would provide farmers with a solid financial foundation, enabling them to prioritize cotton cultivation over alternative crops. In addition, addressing climate change challenges in Pakistan necessitates the development of climate-resilient, modern seeds and strategies to combat pests, particularly whiteflies and pink bollworms. This is a pressing need that calls for enhanced capabilities within research institutions.
To this end, it is imperative that research institutions, particularly the Pakistan Central Cotton Committee (PCCC), receive adequate and immediate funding to alleviate their financial challenges and improve the research and development process. Additionally, imposing a ban on duty-free cotton imports can foster local agricultural production and research initiatives. This policy would encourage the textile industry to support local farmers and research institutions, similar to the support provided by industries such as sugar and rice.
The All Pakistan Textile Mills Association (APTMA) has called on the government to reinstate the zero-rating policy for export manufacturing, eliminate the 18% sales tax on local textile manufacturers, and address delays in tax refunds and additional taxes on textile exports. The approval of these demands should be conditional on the implementation of a cotton restoration program, farmer incentives, and support for Pakistan’s research institutions, particularly the PCCC. Such a comprehensive approach would not only resolve the challenges faced by the cotton industry but also improve cotton production and research. These measures would strengthen the textile industry’s role in promoting cotton and enhance the stability of the national economy. This year, Pakistan is expected to import over 5 million bales of cotton, valued at approximately 2 billion dollars.
Effective policies must be developed to make cotton competitive with other crops, such as sugarcane, rice, and maize. These policies should include financial assistance for farmers, improved seed varieties, and access to modern agricultural machinery. It is also crucial to recognize that the United States, as the largest exporter of cotton to Pakistan, would have no interest in seeing a rise in cotton production in Pakistan or in the full activation of cotton research institutions. The decline in Pakistan’s cotton production aligns with U.S. interests, as it paves the way for increased U.S. cotton exports. In light of this, Pakistan must strengthen its policies and ensure that research and development institutions are insulated from external pressures or interference.
Cotton challenges can be addressed through farmer-friendly policies and efficient market mechanisms. It is essential to provide farmers with direct access to markets and free them from the exploitation of middlemen. Strengthening agricultural markets requires improvements in market infrastructure and providing farmers with opportunities to sell their produce directly. Moreover, enhancing farmers’ productivity through the provision of modern technology and knowledge is key to improving cotton yields.
The cultivation of non-essential crops like sugarcane and rice in cotton-growing areas has had a detrimental effect on water resources and soil fertility. Both sugarcane and rice are highly water-intensive crops, depleting groundwater reserves and diminishing soil fertility. Additionally, the indirect export of millions of gallons of freshwater through rice and sugar exports is unsustainable for a water-scarce country like Pakistan. This issue must be given serious consideration in order to conserve precious water resources and ensure their sustainable use for national interests. Practical and long-term strategies are required to address farmers’ problems and revitalize research institutions.
The 18% tax on cotton should be immediately removed, as it negatively impacts both farmers and the industry. The implementation of these comprehensive measures will not only boost cotton production but also stabilize the national economy and conserve vital resources like water.
According to Pakistan Cotton Brokers Association *PCGA’S arrival figures of 5.19m bales with fortnightly flow of 296777 bales released today, reveals that the cotton season 2024/25 expected to end up around 5.5m bales.
Lackluster situation prevails over cotton market despite low production due to multiple reasons. Demand squeezed drastically because of closure of number of textile industrial units owing to government policies. Therefore, mills are facing acute financial crunch leading to cotton business unrest.
Quality issues also diverted the attention of buyers from local purchase and focusing on imported cotton. Import of yarn also pushed the market to slackness.
However, the ginners holding somewhat better quality are expecting some recovery in cotton business in January.
Cotton analyst Naseem Usman told Business Recorder that a looming cotton crisis is anticipated as local production is projected to fall short of national demand, leading to a substantial import requirement.
This year’s cotton production is estimated to reach only fifty lac bales. This figure excludes unregistered bales, which are often a significant portion of the total production. To bridge the gap between domestic supply and industry demand, Pakistan is expected to import over fifty lac bales of cotton, valued at approximately $2 billion. To date, import agreements for more than 35 lac bales have already been finalized.
The shortfall in domestic cotton production is primarily attributed to adverse weather conditions and other factors affecting crop yield. This development poses a significant challenge to the country’s textile industry, a major contributor to the national economy.
Copyright Business Recorder, 2024
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