Concerns mount as cotton output falls 34%

Pakistan Business Forum (PBF) Chairman for South Punjab Malik Suhail Talat has expressed concern over the recent data released by Pakistan Cotton Ginners Association, which showed production of only 5.524 million bales in the cotton season 2024-25, a sharp decline from the previous year's harvest of 8.393 million bales.

He attributed the decrease to various challenges faced by the cotton sector, particularly the lack of modern research, absence of Export Facilitation Scheme (EFS) and taxation. The general sales tax (GST) of 18% on oil, seed cotton and oilcake has worsened the situation, contributing to a 34% fall in cotton production.

Data breakdown showed that in Sindh cotton arrival in ginning factories reached 2.8 million bales, reflecting a 32% year-on-year drop, while in Punjab, another major cotton-growing region, a sharper 36% decline was registered as output stood at 2.7 million bales.

Talat also pointed to the negative impact of the government's decision to exempt imported cotton and yarn from sales tax, which "is detrimental to the local cotton sector". The imported raw cotton is reportedly costing the industry around $5 billion and is causing market volatility.

Expressing reservations about the EFS committee formed by the prime minister, he argued that there was no need for such a body, while referring to the minutes of the revival of cotton committee meeting held under the Ministry of National Food Security and Research last month. During the meeting, all relevant stakeholders underscored the need for eliminating the EFS body with no necessity for any further committees.

The PBF official also called for the immediate removal of 18% GST on locally produced cotton, adding that timely and decisive actions were essential to revitalise the cotton industry, particularly as the sowing season for 2025-26 crop was underway in both Punjab and Sindh.

"We need to ensure that our cotton farmers are encouraged and supported through favourable policies. This is the only way forward for the future of Pakistan's cotton industry," Talat remarked.

It is worth noting that Pakistan, which is among the top 10 cotton producers globally, is struggling to meet consumer expectations because of unfavourable weather conditions, pest infestations and structural inefficiencies in the sector.