Punjab Farmers Alarmed by Sharp Decline in Cotton Sales

Cotton farmers and ginners in Pakistan's Punjab region have voiced significant worry about the steep decline in domestic Cotton Sales and prices prodespite a substantial decrease in total production. According to Dawn, experts attribute this disturbing trend to record-high imports of cotton from international markets. The Pakistan Cotton Ginners Association (PCGA) reported that the total quantity of ginned cotton in the country reached 5.36 million bales as of December 15, showing a decrease of 33 per cent compared to the same period last year.

Decrease in Cotton Sales and Production

The decline in production was more pronounced in the major cotton-producing provinces, with Punjab and Sindh witnessing a decrease of 34 per cent and 32 percent, respectively, Dawn reported. The report further highlighted that textile mills have procured just 4.7 million bales during this period, a decrease of 34 per cent compared to the previous year. Additionally, exports have fallen dramatically by 84 percent, falling to 46,300 bales. Despite a 33 percent decline in cotton production, ginning factories in the country currently have about 6.14 million bales in stock, similar to last year, said Ihsanul Haque, president of the Cotton Ginners Forum.

Import of Cotton or Cotton Yarn

He attributed this to zero sales tax on imported cotton and yarn, while 18 percent tax is levied on domestic purchases. As a result, textile mill owners are increasingly importing cotton and yarn during the 2024-25 cotton year. Official data shows that as of November 30, Pakistan had imported 182,000 metric tonnes (about 11.38 million bales) of cotton. Experts estimate that Pakistan will import between 55 and 60 million bales of cotton or cotton yarn this year, which will lead to a substantial inflow of foreign exchange. Haque has called on the federal government to impose a sales tax on imported cotton and yarn while exempting domestic purchases. This, he argues, will support local agriculture and industry and help strengthen the national economy.