Pakistan’s cotton production saw an impressive increase of 83% in the 2023-24 season, with a total of 6.79 million bales, providing relief to the country’s foreign exchange reserves, which have been under strain. significant pressure due to the need for cotton imports. However, despite the growth in cotton production, its market price has fallen to Rs 7,000 per 40 kg, significantly lower than the government-announced support price of Rs 8,500 per 40 kg. This price disparity discourages farmers from investing more in cotton cultivation, as the government has yet to fulfill its promise to purchase cotton to stabilize market prices.
The recent increase in gas prices, up to 193%, has compounded the challenges faced by textile manufacturers and exporters, making the country less competitive among regional textile exporters and putting textile exports at risk.
Ahsanul Haq, president of Pakistan Cotton Ginners’ Forum, pointed out that favorable weather conditions, unlike the previous year when excessive rains and floods led to low cotton production, enabled healthy growth of cotton flowers in the during the current production season, which began July 1. He estimated that cumulative production could reach around 9 to 9.5 million bales for the current season, a significant improvement from the less than 5 million bales produced the previous season. However, this production level still falls short of the government’s target of 11.5 million bales for the year.
Haq urged the government to activate the Pakistan State Trading Corporation to immediately start purchasing cotton from farmers and ginners to stabilize the market price at or near the support price of Rs 8,500 the 40 kg. He pointed out that the caretaker government initially announced its intention to purchase cotton from the market, but later the purchasing process was linked to the approval of the Economic Coordination Committee (ECC) of the Cabinet, which has not yet taken place. Ginners mentioned that increasing cotton production would save the country about $1 billion in imports.
Published in The Express Tribune, November 4th2023.