Cotton production in Pakistan has seen an impressive 83% increase in the 2023-24 season, with a total of 6.79 million bales, offering relief to the nation’s foreign exchange reserves, which have been under significant pressure due to the need for cotton imports. However, despite the growth in cotton production, its market price has fallen to Rs7,000 per 40kg, significantly below the government’s announced support price of Rs8,500 per 40kg. This price disparity is discouraging farmers from investing further in cotton cultivation, as the government has not yet acted on its promise to purchase cotton to stabilise market prices.
The recent increase in gas prices, up to 193%, has added to the challenges faced by textile manufacturers and exporters, making the country less competitive among regional textile exporters and jeopardising textile exports.
Pakistan Cotton Ginners’ Forum, Chairman, Ahsanul Haq, pointed out that favourable weather conditions, unlike the previous year when excessive rain and flooding caused low cotton production, have enabled healthy cotton flower growth during the current production season, which began on July 1, 2023. He estimated that the cumulative production may reach around 9 million to 9.5 million bales in the current season, a significant improvement from the less than 5 million bales produced in the previous season. However, this production level still falls short of the government’s target of 11.5 million bales for the year.
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Haq urged the government to activate the state-owned Trading Corporation of Pakistan to begin purchasing cotton from farmers and ginners immediately to stabilise the market price at or near the support price of Rs8,500 per 40kg. He highlighted that the caretaker government had initially announced the intention to purchase cotton from the market, but later, the buying process was linked to approval from the Economic Coordination Committee (ECC) of the Cabinet, which has not yet occurred. Ginners mentioned that the increase in cotton production will save the country approximately $1 billion in imports.
Published in The Express Tribune, November 4th, 2023.
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