Pakistan may import up to 5 million cotton bales

Output falls short

Pakistan may need to import 4 to 5 million bales of cotton this year after domestic output was estimated at 6.71 million bales, 30.4 percent below the government target of 9.64 million, officials said. The Federal Committee on Agriculture released the estimate this week.

Cost of imports

A senior food security ministry official said imports could cost $1.2 billion to $1.4 billion. The textile industry can use 10 to 12 million bales, while the All Pakistan Textile Mills Association puts annual demand at 14 to 15 million. Raw cotton purchases already rose 39 percent to $355.5 million in July and August.

Farmers switch crops

Cotton acreage fell 18.6 percent to 1.76 million hectares this Kharif season, while sugarcane area rose 18.5 percent to 1.36 million hectares. Growers say profits have shrunk. The Sindh Chamber of Agriculture says farmers need Rs10,000 per 40 kilograms, against production costs of at least Rs8,000. Pakistan is avoiding raw commodity support prices under its IMF programme.

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Industry demands reform

The Pakistan Cotton Ginners Association has written to the prime minister seeking quality seed, revived research and withdrawal of sales tax on cottonseed cake. Industry representatives warn that falling output raises import dependence, pressures foreign exchange reserves and weakens export competitiveness. Textile exports earned $17.93 billion in the last fiscal year. The shortfall hits a crop that contributes 0.8 percent of GDP, according to the Punjab agriculture department. Punjab is expected to produce 3.69 million bales and Sindh 2.53 million. Last year's output was 7.05 million bales against a target of 10.2 million.