Rahim Yar Khan - Despite the launch of the new cotton ginning season in mid-May, Pakistan’s cotton sector is teetering on the edge of an economic collapse, industry experts warn. The crisis stems primarily from duty-free cotton and yarn imports, which threaten to undercut domestic production and push ginning and textile operations below 50 percent capacity during the 2025–26 Cotton Year.
Industry insiders warn that during the Cotton Year 2025-26, the cotton ginning and textile industries may operate at less than 50 percent of their full capacity. This decline in productivity is expected to force Pakistan to once again import billions of dollars’ worth of cotton and edible oils, further straining the national economy.
Senior cotton ginners informed The Nation that three ginning factories are now operational in the cities of Khanewal and Burewala in Punjab. Additionally, reports indicate that one or two ginning plants in Tando Adam, Sindh, are expected to become active from May 25. They revealed that initial cotton sales are being negotiated at rates between 17,000 and 17,500 rupees per maund, while new cotton seed (phuti) is being bought and sold at rates ranging from 8,300 to 8,500 rupees per forty kilograms.
Furthermore, they mentioned that the federal government has, after nearly fifty years, permitted the import of cotton seeds into Pakistan. However, reports suggest that some high-ranking government officials and private seed companies have previously experimented with importing cotton seeds from China, Australia, the United States, and Brazil for trial cultivation across various regions. These efforts, however, proved unsuccessful largely due to the failure to implement crop zoning laws, which led to environmental pollution and adversely affected cotton yields.
Currently, the primary issue facing Pakistan’s cotton industry is not production but consumption. Despite the second-lowest harvest in history—only about 5.5 million bales during Cotton Year 2024-25—there is still approximately two to two and a half lac bales of cotton available for sale in ginning factories. Moreover, millions of rupees worth of cotton sold on credit by ginners remain unpaid by some textile mills.
The industry experts also expressed concerns about the impact of water shortages and sudden temperature rises in parts of Punjab, Sindh, and Balochistan. These factors threaten cotton cultivation, as crops are reportedly suffering from sunscald immediately after harvesting.
They warned that if the federal government fails to abolish the Export faciliting scheme(EFS) on cotton imports in the upcoming budget, the country’s cotton industry could face an unprecedented economic crisis. This would result in billions of dollars spent on importing cotton, yarn, grey cloth, and edible oils, severely depleting foreign exchange reserves.