THE extremely slow arrival of phutti at the ginning factories of Punjab and Sindh so far indicate a huge drop in the total cotton output this year. The latest cotton arrivals reported by the ginners show that the harvest has already plunged by nearly 60pc to just 2m bales, forcing many to revise down the final production projections for 2024-25 to 4.5-5m bales against the official target of 10.8m. Last year’s crop yield had peaked to 8.4m bales for the first time after 2018. The poor output this year is being attributed to unfavourable weather conditions and lesser-than-targeted sowing because of a drop in cotton prices and demand last year. However, some insist that the output will be higher as the reported arrivals do not take into account unregistered sales to textile mills to evade taxes. It is being claimed that at least 0.5m to 1m bales have been sold in the shadow market owing to the absence of a track-and-trace system to prevent tax evasion.

The consistent decline in output in recent years underscores Pakistan’s growing cotton woes because of climate change, bad agriculture policies, disease and the rising cost of inputs. This situation has not only led to the conversion of scores of ginning factories in south Punjab into real estate projects, and affected textile exports, it has also put significant pressure on the country’s already weak foreign exchange reserves. During the last eight years, Pakistan’s average spending on cotton imports stood at $1bn a year. The cotton import requirements for the present year are estimated to be around $2bn at a time when the country is scrambling to secure more loans to build up its international reserves and stabilise a fragile balance-of-payments position. The fall in cotton production also means that Pakistan’s textile exporters are losing their comparative advantage in the international market, and hence their market share. This may lead to the closure of some textile and clothing manufacturing units in the country unless the government takes measures to boost the domestic production of cotton through policy interventions. It would not be out of place here to recall that India, which used to lag behind in cotton yield until the late 1990s, has more than trebled its output since then. Pakistan can also do so by adopting new seed technologies and ensuring profitability for cotton farmers.

Published in Dawn, October 7th, 2024