Cotton Production Plummets, Sparking Economic Concerns

The nation’s cotton production has experienced a significant downturn, with a concerning 17% decrease that poses substantial challenges for the agricultural sector. This decline is primarily due to the impacts of climate change and unseasonal rainfall patterns.

The cotton trade has been markedly affected by the prolonged rainy season, leading to limited commercial activities. Farmers and traders alike are currently grappling with financial setbacks because of these conditions.

Variations in weather have resulted in notable differences in cotton crop quality across regions. While some areas have benefited from rainfall, fostering satisfactory production, others face the peril of severe crop damage due to water accumulation. Excessive moisture threatens cotton plant roots, potentially diminishing overall yields.

According to Ehsan-ul-Haq, Chairman of the Cotton Ginners Forum, approximately half of Punjab’s ginning factories are presently inactive, an unprecedented situation. This development raises serious concerns for the industrial sector and carries broad economic implications.

Sajid Mahmood, Head of Technology Transfer at the Central Cotton Research Institute Multan, emphasized that government support and structured initiatives are vital for a sustainable cotton recovery. He asserted the immediate need for effective solutions.

The Prime Minister has voiced concerns about the cotton industry’s decline, signaling the urgency for governmental intervention. The importance of addressing this critical issue has been underscored, with a focus on implementing prompt and effective measures.

Beyond the immediate financial hardships for farmers, the textile industry, a cornerstone of the national economy, is also feeling the repercussions. Experts warn that inaction could exacerbate the existing problems.

The local cotton market saw fluctuating price trends over the past week, with business significantly hindered by continuous rainfall, resulting in diminished trading volumes.

Textile and spinning mills are proceeding cautiously with purchases, while ginners are equally conservative in their cotton acquisition strategies due to prevailing weather conditions. Current rainfall patterns present varied impacts on crop health across different regions. Areas without waterlogging show acceptable crop status, but waterlogged fields face potential harm.

Diminished cotton lint availability due to rainfall-induced disruptions and sluggish business has led to about 50% of Punjab’s ginning factories being inactive, a historic first.

Data from the Pakistan Cotton Ginners Association indicates that cotton arrivals in Pakistan have fallen by 17% year-on-year, reaching 887,400 bales as of August 15.

Cotton prices in Sindh ranged from 16,200 to 16,400 rupees per maund based on quality, while cotton Phutti was valued between 6,500 to 7,400 rupees per 40 kilograms depending on grades.

Punjab reported cotton prices between 16,300 to 16,600 rupees per maund, with Phutti trading at 6,800 to 7,600 rupees per 40 kilograms.

Balochistan’s cotton prices ranged from 16,100 to 16,300 rupees per maund, while Phutti prices were between 6,800 to 7,500 rupees per 40 kilograms.

The Karachi Cotton Association’s Spot Rate Committee set the spot rate at Rs 16,200 per maund.

Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, mentioned stable international cotton prices, with New York cotton futures between 68.50 to 71 American cents per pound.

The United States Department of Agriculture’s report showed cotton sales for 2025-26 reached 105,400 bales, indicating robust international demand.

Vietnam led in international cotton purchases, acquiring 35,800 bales, followed by Pakistan with 28,100 bales, and Bangladesh with 21,300 bales.

Prime Minister Shehbaz Sharif emphasized the need for national efforts to rejuvenate the cotton sector, which has plummeted from 14 million bales to just 4 million bales in recent years.

Addressing an event for students going to China for agricultural training, Shehbaz Sharif called agriculture the national economy’s backbone and stressed the need to modernize it, particularly in cotton and livestock.

The cotton industry faces severe challenges, with 50% of Punjab’s ginning factories idle due to weak sales, contributing to a continued decline in cotton prices.

Anticipated rainfall in Punjab and Sindh poses more risks to crops and harvested cotton quality, potentially worsening the industry’s problems.

Ehsan-ul-Haq noted that the reduced cotton quality has lowered demand, leading to unsold stocks in ginning factories, pushing them into financial crisis and closures.

He added that the Pakistani rupee’s appreciation against the US dollar has also decreased cotton prices, with prices falling by Rs. 200 per maund to Rs 16,300 per maund over the week.

The prospect of additional rainfall has heightened concerns about further damage and quality deterioration, worsening the existing challenges.

Ehsan-ul-Haq mentioned the upcoming release of cotton production data by the Pakistan Cotton Ginners Association (PCGA) as of August 15, but discrepancies in data have caused concern.

The PCGA reported 301,000 bales received by Punjab’s ginning factories by July 31, while the Crop Reporting Centre Punjab cited 609,000 bales produced, creating confusion among stakeholders.

Sajid Mahmood stated that cotton research and development in developed countries are government managed, and Pakistan needs its textile industry to collaborate with research institutions and farmers to improve production and quality.

Citing past failures, he mentioned the Cotton Foundation and the suspension of the cotton cess, emphasizing the need for genuine collaboration.

Sajid Mahmood also noted the declining national production despite local seed companies introducing new varieties, with cotton production peaking in 2014 when government institutions dominated research.

He emphasized that region-specific solutions are needed, as problems are local and require local research and technology. The crisis stems from low market prices, reduced farmer profitability, and insufficient investment in research institutions.

Sajid Mahmood emphasized that cotton prices in Pakistan remain tied to the global market despite rising costs, and no foreign company has shown practical interest in establishing research systems.

Sajid Mahmood concluded that competitiveness is crucial for reviving cotton, requiring the textile industry and private seed companies to establish research systems to provide farmers with diverse, high-quality seeds, and a sustainable research framework. He reiterated that government support and effective management are essential for a comprehensive revival.

Cotton arrivals in Pakistan dropped 17% year-on-year to 887,400 bales as of Aug 15, primarily due to a sharp decline in Punjab’s output, raising concerns over the country’s domestic production outlook.

Data released by the Pakistan Cotton Ginners Association (PCGA) on Monday, Punjab witnessed a reversal by mid-August, with arrivals now 6pc lower than the same period last year. Sindh has narrowed its shortfall to 24pc.

Industry attributes the slump to recent rains, which have damaged quality, reducing demand from textile mills and forcing many ginning factories to halt operations. Ihsanul Haq remains hopeful that with improved conditions, ginning activity in Punjab will resume soon.