RAHIM YAR KHAN  -  Pakistan’s cotton crop and ginning industry are experiencing an unprecedented crisis, driven by unfavourable government economic policies and harsh weather conditions. Industry experts warn that the situation, already dire, is deteriorating further due to the imposition of over 70 percent sales tax, which has forced an increasing number of ginning factories to cease operations. While more than fifty factories in Sindh and Punjab have managed to resume partial activities but there is not a single ginning factory in the country running round-the-clock.

Senior figures in the cotton sector report that, this season, temperatures in most of the country’s major cotton zones have soared above 45 degrees Celsius. The extreme heat, coupled with a severe shortage of canal water, has had a devastating impact on the crop at every stage of its development. There are growing fears that, for yet another year, national cotton production will fall drastically short of expectations.

According to agri experts, high temperatures and water scarcity have damaged mature cotton’s fibre and seed quality, while also causing shedding of bolls and flowers at mid-stage, and even wilting of plants in the early phase. Both the quantity and the quality of the crop are under threat. Agronomists are advising farmers to apply micronutrient sprays, such as boron, to crops in the flowering or initial stages to help mitigate the adverse effects of the weather. The ginning industry’s troubles do not end with the weather.

The failure to withdraw sales tax on ginning in the federal budget has deepened the economic crisis. Despite partial reopening in over fifty factories across Sindh and Punjab, none have sustained operations for a full 24 hours, reflecting the extent of the sector’s difficulties.

Market activity remains subdued. Over the past week, cotton prices have been stable, with transactions in Punjab at Rs17,000 per maund and in Sindh at Rs16,700. However, textile mills have shown little interest in large-scale purchases, further compounding the industry’s woes. Industry insiders also note that the ongoing Iran-Israel conflict could disrupt shipping routes, potentially delaying the arrival of imported cotton and placing upward pressure on domestic prices.

Adding to the sector’s challenges, some textile mills have yet to pay millions of rupees owed for cotton purchased on deferred payment terms during the 2024-25 cotton year. This growing backlog of unpaid dues is now being cited as a significant factor propelling the ginning industry deeper into crisis.

With both environmental and policy challenges mounting, stakeholders across Pakistan’s cotton sector are calling for urgent government intervention and a comprehensive review of current economic measures. Without timely action, the very future of one of the country’s most crucial agricultural industries may be at stake.