Pakistan’s cotton import bill may exceed $1 billion as output falls to 40-year low

Pakistan may spend over $1 billion on cotton imports this year as domestic production is projected to fall to a four-decade low, with imports estimated at 7 million to 7.5 million bales against expected local output of only 5 million to 5.5 million bales, the Pakistan Business Forum told the government during budget consultations.

During the meeting, Federal Minister for National Food Security and Research Rana Tanveer Hussain assured stakeholders of the government’s support for reviving cotton production and strengthening the agriculture sector.

A PBF delegation led by Chief Organiser Ahmad Jawad presented proposals aimed at creating a level playing field for the cotton sector and reducing dependence on imported cotton.

According to PBF Punjab Chairman Malik Talat Suhail, the projected import requirement could push Pakistan’s cotton import bill to between $1 billion and $1.2 billion, adding pressure on the country’s foreign exchange reserves.

He said cotton cultivation had dropped to its lowest level in 40 years, while nearly half of Pakistan’s cotton ginning factories had shut down because of declining local production.

The minister acknowledged the challenges faced by growers and ginners and said agriculture and cotton remained critical components of the national economy.

He added that the government would seriously consider practical and farmer-friendly proposals aimed at increasing domestic cotton output and reducing reliance on imports.

The PBF also proposed abolishing General Sales Tax on locally produced cottonseed and oilcake, describing it as a long-standing demand of farmers and ginners.

Ahmad Jawad said the existing taxation structure was increasing production costs and discouraging cotton cultivation across the country.

Suhail said removal of GST on cottonseed and oilcake could increase farmers’ returns by at least ₨600 per maund while supporting economic activity and improving revenue collection for the Federal Board of Revenue.

Industry representatives warned that urgent policy intervention was needed to restore farmer confidence and stabilise Pakistan’s cotton sector.