The slow arrival of cotton at ginning factories in Punjab and Sindh indicates a significant decline in cotton production this year. The reported arrivals show a drop of nearly 60% to just 2 million bales, leading to revised production projections of 4.5-5 million bales compared to the official target of 10.8 million. This decline is attributed to unfavorable weather conditions, reduced sowing due to lower cotton prices and demand last year, and unregistered sales to textile mills to evade taxes.
The consistent decline in cotton output in recent years highlights Pakistan’s growing cotton woes due to climate change, ineffective agricultural policies, diseases, and rising input costs. This situation has led to the closure of ginning factories, impacted textile exports, and put pressure on foreign exchange reserves. Pakistan’s average spending on cotton imports over the past eight years has been $1 billion annually, and the current import requirements are estimated to be around $2 billion.
The fall in cotton production also threatens Pakistan’s comparative advantage in the international textile market, potentially leading to the closure of textile and clothing manufacturing units. India’s success in increasing its cotton output significantly since the late 1990s demonstrates that Pakistan can also achieve similar results by adopting new seed technologies and ensuring profitability for cotton farmers
The decline in cotton production in Pakistan is a multifaceted crisis with far-reaching implications for the country’s economy. While the immediate causes may be attributed to unfavorable weather conditions and reduced sowing, the underlying issues are more complex and systemic.
Pakistan’s vulnerability to climate change is evident in the increasingly erratic weather patterns, including heatwaves, droughts, and floods. These extreme events disrupt the cotton crop cycle, leading to lower yields and quality. Additionally, outdated agricultural practices and a lack of investment in research and development have contributed to the decline in cotton productivity.
The government’s role in promoting cotton cultivation has been inconsistent and often ineffective. Inadequate pricing policies, lack of access to credit, and limited extension services have discouraged farmers from investing in cotton. Moreover, the high cost of inputs, including fertilizers, pesticides, and irrigation, has eroded the profitability of cotton farming.
The prevalence of tax evasion and smuggling in the cotton sector has further exacerbated the crisis. Unregistered sales to textile mills have deprived the government of revenue, while smuggling has distorted the market and undermined the competitiveness of domestic cotton.
The decline in cotton production has had a significant impact on the textile industry, which is a key driver of Pakistan’s economy. Textile exports have been hampered by the rising cost of raw materials, and many manufacturing units have faced closure due to the unavailability of cotton. This has led to job losses and a decline in foreign exchange earnings.
