Karachi, January 18, 2025 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has raised serious concerns over the drastic decline in cotton production, warning of its potential impact on the economy, especially the country’s textile exports.
According to Saqib Fayyaz Magoon, Senior Vice President of FPCCI, Pakistan’s cotton production has dropped from 14 million bales to 5 million bales over the past decade, a situation he described as alarming. He noted that the shortfall has forced Pakistan to import $2-3 billion worth of cotton annually, putting additional pressure on the country’s already struggling foreign exchange reserves.
Magoon highlighted that the production shortfall poses a significant risk to Pakistan’s textile export sector, which relies heavily on locally grown cotton. He also criticized the imbalance in taxation, pointing out that domestic cotton is subject to sales tax, while imported cotton enjoys tax exemptions. This disparity, he argued, discourages local cotton farming. To address the issue, Magoon urged the government to ensure a level playing field for domestic and imported cotton. He also called for the introduction of a government-supported price for cotton to protect local farmers from market volatility and encourage higher production.
Challenges in Research and Land Utilization
Asif Inam, Vice President of FPCCI, emphasized the lack of research in cotton production as a major obstacle. He urged policymakers to promote innovative farming techniques and incentivize large-scale cultivation of cotton.
Meanwhile, Sham Lal Manglani, Chairman of the Task Force on Agriculture, pointed out that cotton-growing land has decreased by half, as farmers shift to cultivating rice and sugarcane due to their higher profitability. This shift has further exacerbated the production crisis.
Foreign Exchange Potential
Despite the challenges, experts like Dr. Jassu Mal, Chairman of the Pakistan Cotton Ginners Association, believe that cotton has the potential to generate substantial foreign exchange. However, he warned that Punjab alone faces a shortfall of 4 to 5 million bales compared to demand.
The FPCCI has urged the government to take urgent action, including better research initiatives, policy reforms, and incentives for farmers, to reverse the declining trend in cotton production. Without these measures, the country risks increased dependency on imports and a weakened textile export sector, further straining the national economy.