Pakistan importing cotton from US, Brazil even before local ginning season

Lead

Pakistan's textile industry has started importing large volumes of cotton from the United States and Brazil even before the start of the domestic ginning season, with local stocks having virtually run out. According to a report by Dawn, Pakistani mills recently purchased approximately 206,100 bales of the US 2026-27 cotton crop, representing about 95 percent of the total sold in the weekly US export market. Another Dawn report noted that Pakistan emerged as the largest buyer of US cotton for the second consecutive week, with mills also sourcing substantial quantities from Brazil.

Coverage Comparison

The reports, all from Dawn, present a consistent narrative about the severity of Pakistan's cotton crunch, though they emphasize different aspects of the crisis. One story from Lahore focuses on the immediate market fallout, describing how Pakistan's emergence as the top US cotton buyer came despite a sharp fall in domestic prices during the Eidul Azha holidays. Another piece takes a broader view, framing the imports as part of an 'unprecedented' development where the country may spend billions of dollars on cotton and edible oil imports—potentially the highest bill in its history.

A third study examines the production outlook, highlighting the wide gap between official targets and realistic expectations. While the Federal Committee on Agriculture has set a production target of 9.64 million bales for the 2026-27 crop, the US Department of Agriculture (USDA) projects output at around 6.94 million bales, implying imports of over 7 million bales to meet domestic consumption of 14 million bales.

The differing emphases reflect the complexity of the challenge: the immediate price dynamics, the structural decline in production, and the policy responses—or lack thereof—that have brought the country to this point.

Key Claims

Industry bodies urge policy relief: The Cotton Ginners Forum and All Pakistan Textile Mills Association (APTMA) have called on the government to reduce taxes, energy tariffs, and interest rates in upcoming budgets. Specific demands include abolishing sales tax on cotton and related products, withdrawing the super tax, and lowering markup rates, according to Dawn.

Domestic prices fall despite import dependence: Cotton prices fell sharply during the Eidul Azha holidays, with phutti prices dropping by Rs1,500 per maund to Rs10,500 per 40 kilograms. In Sindh, cotton fell by Rs2,000 per maund to Rs21,000, while Punjab saw a decline of Rs1,000 to Rs22,000 per maund. A new tax on cotton transport from Sindh to Punjab has widened the provincial price gap, according to Cotton Ginners Forum Chairman Ihsanul Haq.

Historical context: Last season, Pakistan produced only about 5.6 million bales against a target of 10.2 million bales. Cotton acreage has steadily shrunk, yields have stagnated, and the country has grown increasingly dependent on imports.

Perspectives

Government outlook: Official targets remain optimistic, with the Federal Committee on Agriculture eyeing 9.64 million bales for 2026-27.

International outlook: The USDA projects production at just under 7 million bales, a gap that would necessitate massive imports.

Industry outlook: Textile mills are securing supplies from global markets, citing uncompetitive domestic policies, high energy costs, and a deteriorating investment climate. APTMA has specifically linked its survival to reduced taxation and cheaper energy.

Comparative regional perspective: India's recent decision to abolish all taxes and duties on cotton imports from June 1 to October 31 has been described by industry observers as a strategic move to secure raw materials for its own textile sector, highlighting regional competition in the cotton market.