Pakistan has emerged as the largest global buyer of American cotton for the first time, primarily due to tax-free imports and a significant shortfall in local cotton production exacerbated by adverse weather conditions.
According to a report by the US Department of Agriculture, Pakistan imported 1.192 million bales (160 kg each) of US cotton, surpassing Vietnam, Turkiye, and China.
Estimates suggest contracts for an additional 3.0 to 3.5 million bales have been signed with the US, Brazil, and other countries, with total imports expected to reach 5.5 million bales this year to meet domestic textile requirements.
Ehsanul Haq, chairman of the Cotton Ginners Forum, attributed the surge in imports to the 18% sales tax imposed on domestic cotton, which incentivized millers to turn to tax-exempt imported lint.
Yarn imports have also been exempted, leading to suppressed prices of local cotton and raising concerns among domestic growers.
Haq noted that Indian yarn is reportedly entering the Pakistani market via Dubai, further complicating the situation for the local cotton sector.
The reliance on imports highlights the challenges faced by Pakistan’s agricultural sector, which is grappling with declining yields and quality issues amidst changing weather patterns.
