Pakistan becomes leading buyer of US Cotton amid local production crisis

KARACHI: Pakistan has emerged as the largest global buyer of US cotton due to significant decline in domestic cotton production due to climate change.

The major reason for this change is attributed to the severe weather conditions and the loss of cotton crops due to the decline in the quality of domestic production.

According to Ehsan ul Haq, chairman of Cotton Generous Forum, last year saw a record drop in cotton prices, due to which cotton cultivation decreased this year. Compounding the problem, unprecedented rainfall has severely damaged the cotton crop, resulting in a significant decline in both the quantity and quality of domestic cotton.

Ehsan-ul-Haq highlighted that based on recent reports, Pakistan has become the largest importer of US cotton in the last three weeks. The country has signed import agreements for 1.5 million bales of cotton from the US, Tanzania, Brazil and Afghanistan.

The significant difference in cotton production figures between the public and private sectors in Punjab’s cotton belt has raised concerns among stakeholders. The latest data from the Pakistan Cotton Ginners Association (PCGA) showed a 60 percent decline in bales of cotton processed by ginning factories till August 31, totalling 1.226 million bales. .

The report states that ginning factories in Punjab processed cotton equivalent to 453,000 bales while Sindh processed 773,000 bales. These figures represent a 58% and 61% decrease, respectively, compared to the same period last year.

At present, only 272 ginning factories are functioning, and textile mills have purchased 1.226 million bales of cotton, leaving only 54,000 bales available for sale in ginning factories.

The PCGA report showed cotton production in Punjab as of August 31 at 453,000 bales, while the Crop Reporting Center Punjab estimated production at 759,000 bales, which is 67 percent higher than the PCGA figures.

Ehsan-ul-Haq also mentioned concerns over unofficial sales of cotton in some areas, which has led to a decline in production figures. He pointed out that recently the price of cotton increased by Rs 1000 per maund to Rs 19,500 in Punjab and Rs 19,200 in Sindh. However, despite the holiday on Sunday, prices unexpectedly fell by Rs 1,200 per maund, dropping to Rs 18,300 in Punjab and Rs 18,000 in Sindh, causing panic among cotton ginners and farmers.

This situation highlights the growing challenges facing Pakistan’s cotton industry and emphasizes the need for effective measures to address the current production and pricing issues.