LAHORE: Pakistan is struggling to achieve a decent cotton output this year if the arrival of 5.5 million bales reported by the Pakistan Cotton Ginners Association (PCGA) on Jan 18 is any guide.

Overall, the country’s cotton production is estimated to decline during the present marketing year by almost a third to 5.7m bales from 8.3m bales last year and 60pc from 13.9m bales in 2014. The cotton arrivals from Punjab are reported to have dropped by 30.6pc and Sindh by 38.7pc.

According to PCGA Chairman Jassu Mal, the phutti arrivals at the ginning factories are the lowest in more than three decades resulting in the closure of 800 factories out of a total of 1,200, loss of tens of thousands of jobs and reduced income for cotton-picker women.

There are multiple factors for the decline in the production of cotton, which provides livelihoods to 1.2m farmers who grow the white gold on around 8m acres mainly in Punjab and Sindh. A large part of the rural economy, and textile & clothing exports, which constitute nearly 60pc of the country’s total overseas shipments, are dependent on locally grown cotton. The massive fall in the cotton production, according to the Pakistan Bureau of Statistics (PBS) data for the first half of the current fiscal year, has led the textile industry to import 331,560 tonnes of cotton worth $532.1m compared with the last year’s imports of 49,573 tonnes valuing at $86.9m.

Textile sector recovering

Mohammad Saad Ziker, an Insight Research analyst, says the textile sector is on its way to recovery following the removal of the Covid-19 restrictions. “We are witnessing a sharp surge in our textile & clothing exports for the last six months with the December shipments reported at $1.4bn, the highest-ever in a given month. But the growth is being achieved through imports of cotton and man-made yarn. To facilitate imports the government also has removed 5pc regulatory duty on cotton.”

“Many factors have stacked up against cotton growers,” an executive of a multinational seed company told Dawn. “For instance, the cost of the cotton production has grown massively in the last 10 years. The market prices, on the other hand, have lagged behind during this period, eroding growers’ margins. The area under cotton crop has also decreased from 2.96m hectares in 2014 to 2.53m hectares in 2019. It shrank further by 12pc in 2020 from a year ago because of better and more stable returns in competing crops — maize, sugarcane and rice. Additionally, the use of poor quality seed and changing climate has also played a major role in the consistently poor performance of the crop.”

800 ginning units closed amid lowest phutti arrivals in over three decades Textile industry imports 331,560 tonnes of cotton worth $532.1m in first half of current fiscal year

Mr Mal endorsed the executive, lamenting that India has successfully increased its cotton production to 35m bales from 11m bales in last 20 years by adopting new seed technology. Similarly, Brazil has boosted its output to 13m bales from 5m in three years. “The lack of investment in cotton seed research and an inability to adopt new technology owing to poor enforcement of intellectual property (IP) has brought us to a situation where we need to heavily import cotton to meet our industry’s requirements.”

The stakeholders agree that there is no quick fix to the nation’s cotton woes. “We need to develop a long-term strategy to boost our cotton production if we want to double our textile and clothing exports,” argues a textile mill owner without giving his name. “It will take at least 5-6 years before we can increase our cotton output to 20m bales as envisioned in the Aptma’s Vision 2010.

Enhance research capacity

The government can start by enhancing the capacity of its research institutions through immediate involvement of the private sector and creation of a robust regulatory regime, as well as building confidence of seed technology providers by laying out the clear policy on genetically modified (GM) seed technology,” he added.

Enforcement of laws needed

The multinational seed company executive points out that Pakistan is fifth largest market in the world for the seed companies. “But the lack of an enabling environment is stopping international players from investing here. Though Pakistan has developed an overarching legal framework in place that, in theory, provides for protection to the GM seed companies, it is found wanting in institutional capacity and requisite enforcement of the laws.

“For example, the Plant Breeders Rights Act enacted in 2016 still awaits implementation in letter and spirit. Similarly, despite a well-documented policy to adopt biotech innovation in agriculture, much of the action on ground remains inconsistent with the government’s policy position. Therefore, a clearly defined and predictable regulatory regime, together with effective enforcement of existing laws will go a long way in restoring confidence of seed technology providers in exploring investment opportunities in Pakistan’s cotton seed market.”

The textile mill owner says Pakistan’s cotton woes go beyond low yields. “The cotton grown here is of average quality with short fibre length, which cannot be used for producing high-end textile products required for exports. We need to implement a programme for producing long staple cotton. Besides, we have long been raising the issue of high contamination of cotton as Pakistani ginned cotton carries 10pc trash. No focused attempt is made to improve the cotton picking, packaging and ginning to reduce the trash and moisture level in it.”

The plan to grow textile & clothing exports to around $21bn by 2025 and $50bn by 2030 will remain a pipe dream without boosting the output and improving the quality of domestic cotton on a war footing.

Published in Dawn, January 31st, 2021