Latest news with #PakistanCottonGinnersAssociation
Business Recorder
6 hours ago
- Business
- Business Recorder
Reviving cotton: a call for a unified national policy
Pakistan's cotton sector, once the backbone of the agricultural economy, now stands at a critical juncture. Declining productivity, deteriorating quality and deep-rooted systemic challenges are threatening its future. Without a cohesive and long-term national cotton policy, revival may become increasingly difficult. Recent figures for the 2025–26 season reflect a sharp decline in performance. A report released by the Pakistan Cotton Ginners Association (PCGA) on 15 July 2025 has raised serious concerns. It warns that continued inaction will not only weaken Pakistan's largest export industry, the textile sector, but also significantly increase the national import bill. Several interlinked factors have contributed to this ongoing crisis. In Sindh, water shortages, erratic weather patterns and widespread whitefly infestations have severely affected crop health. Compounding these challenges are issues such as price uncertainty, the inactive role of the Trading Corporation of Pakistan (TCP), and the imposition of an unjustified 18 percent General Sales Tax (GST) on raw cotton and its by-products. This taxation policy places an undue burden on farmers and discourages activity in local markets. Meanwhile, intense and unseasonal monsoon rains have further worsened the situation. Waterlogging in cotton fields and high humidity are expected to lead to increased pest attacks, compromising both crop quality and yield. This creates uncertainty in prices and may disrupt the industrial supply chain, ultimately delaying export commitments. A major obstacle to effective policymaking is the lack of consistent and reliable national data. Various institutions including the PCGA, Cotton Crop Reporting Service (CCRS) and the Pakistan Bureau of Statistics (PBS) publish separate figures, often with significant discrepancies. This fragmentation of data hinders timely and evidence-based decision-making, highlighting the urgent need for a centralized and transparent reporting system. The persistent delay in the issuance of Statutory Regulatory Orders (SROs), particularly those concerning imported cotton, is another pressing concern. Such delays create confusion for manufacturers, affect production planning and undermine investor confidence. Timely issuance of SROs is crucial to maintaining policy continuity and supporting the textile sector's operational needs. Another area of concern is the stalled restructuring of the Pakistan Central Cotton Committee (PCCC), the country's leading cotton research institution. According to the Cabinet Division, PCCC was scheduled to merge with the Pakistan Agricultural Research Council (PARC) by 30 June 2025. However, the lack of progress on this front has left the organization in a state of uncertainty. This delay not only jeopardizes research continuity but also demoralizes the scientists, experts, and support staff involved. Despite the seriousness of the situation, the policy response remains slow and fragmented. While seed improvement is undoubtedly important, it cannot address the broader crisis unless accompanied by a comprehensive, farmer-focused and industry-supported national cotton policy. Cotton is more than just a crop. It sustains the economy, supports millions of rural livelihoods and powers the country's largest industrial sector. Without strong foundations in cotton, the entire value chain becomes fragile. Policymakers must act decisively. A clear, actionable and long-term policy framework is not a luxury, it is a necessity. Failure to act will deepen stakeholder mistrust. Farmers, researchers, and industrialists alike will continue to suffer. In the absence of coordinated national efforts, we risk being left with little more than reports and regrets. Copyright Business Recorder, 2025
Express Tribune
2 days ago
- Business
- Express Tribune
Farmers suffer Rs1.26tr blow
Listen to article A troubling trickle-down effect is unfolding across Pakistan's agricultural landscape, where a mix of government apathy, flawed policies and unchecked input costs is pushing the sector towards collapse. Once considered the backbone of the country's economy, agriculture, especially cotton, is showing signs of irreversible decline, with millions of farmers suffering unprecedented losses. What began with a crisis in wheat and maize has now extended to cotton, vegetables and fruits, exposing deep-rooted policy failures and the lack of state intervention. According to official data for January-June 2025, Pakistani farmers endured collective losses of over Rs1.26 trillion. The most significant blows came from rice and maize, together accounting for a staggering Rs1 trillion in damages. Export figures paint an equally grim picture – a drop of over $1 billion in total agro-export value compared to the same period in 2024. Among export volumes of major crops, maize fell by 70%, banana by 69%, mango by 40% and onion and garlic by 31%. The harvest of cotton, a critical crop for Pakistan's textile sector, has gone down by 30.7%, according to the Economic Survey 2024-25, underscoring its worst performance in a decade. This steep fall forced the country to import 854,263 metric tons of ginned cotton in just six months at a cost of $1.66 billion. Yet, despite this financial haemorrhage, local farmers remain unsupported. Early PCGA (Pakistan Cotton Ginners Association) figures confirm only 1.3 million bales have reached ginning factories so far this year, a sharp decline from past seasons. Heavy rainfall in Sindh and Punjab has devastated fields and fibre quality, further threatening an already crippled cotton industry. Progressive farmer Shahid Jutt from Vehari said that they were already struggling with poor returns and now climate change has turned against us. "But the real damage is from the system – no price support, no subsidies and no planning," he added. The cotton price, standing at Rs5,500-6,000 per maund in 2010-11 when the dollar was at Rs85, equated to around $70. Today, despite a nominal rise to Rs7,600 per maund, the dollar equivalent has dropped to just $27 due to currency depreciation. Meanwhile, input costs have surged more than fourfold, with fertiliser, diesel and electricity becoming unaffordable for many small and medium-scale farmers. Fertiliser offtake has dropped drastically – 29% for nitrogen and 15% for phosphates – simply because farmers cannot afford the recommended doses. Farmers are applying fewer nutrients, resulting in lower yields and further income losses. In vegetable production, prices have crashed. Onion growers, for instance, saw a price drop of over 55%, leaving thousands of smallholders on the brink of financial ruin. Agricultural economist Dr Imran Awan said that this is not just a bad year, it's a culmination of years of negligence. "Government budgets continue to ignore pressing needs of the agriculture sector. Research, extension services and seed development have been left to die. Climate change is hitting us hard, but we are not investing in resilience or planning for contingencies." In the early 2010s, Pakistan's cotton sector was thriving, with annual output between 11.7 and 14.8 million bales. Cotton exports during that time reached 1.1 million bales and imports were minimal. Fast forward to 2025 and cotton production is hovering below 7.5 million bales. This year, with rain-damaged fields and substandard fibre, output may even drop below 4 million bales, while imports continue to cross 5 million bales, despite many textile mills working below capacity or even shutting down. Input costs have surged uncontrollably. Diesel, essential for farm machinery, is now priced at Rs284 per litre. Electricity for irrigation has become a luxury, costing over Rs42 per unit, while farmers in neighbouring countries benefit from subsidised or free electricity for agricultural use. This cost imbalance is crushing Pakistan's competitiveness in the regional market. Pakistan Kissan Itehad President Khalid Mahmood Khokhar said that farmers are working harder than ever before but are being punished with shrinking profits and soaring costs. "Fertiliser is unaffordable, diesel eats up our earnings and there's no relief in sight. This crisis began when wheat support price was ignored, which demotivated farmers. Now cotton is suffering and the government remains silent," he said. PKI called for undertaking urgent reforms, including improved investment in agricultural R&D and seed technology, regulated input prices and the formation of an independent price and commodity export commission to ensure fair pricing and manage exports based on domestic supply. It also demanded a nutrient-based subsidy system for phosphatic and potassic fertilisers to ease farmers' financial burden.
Business Recorder
16-06-2025
- Business
- Business Recorder
Weekly Cotton Review: Prices dip further as spot rate falls by Rs500 per maund
KARACHI: The downward trend in cotton prices persists, with the spot rate declining by Rs 500 per maund. Several ginning factories in Sindh and Punjab have partially resumed operations, with approximately 8,000 to 10,000 bales of cotton lint reaching ginning factories so far. However, the government has not announced any incentives for ginning factories in the budget, instead imposing an 18% sales tax on yarn imports—a move that has left ginners deeply disappointed. Ihsan-ul-Haq, Chairman of the Cotton Ginners Forum, stated that this decision is detrimental to the industry. Similarly, the Pakistan Cotton Ginners Association (PCGA) has also rejected the budget, calling it 'poisonous' for farmers and the ginning industry. According to Dr. Jesumal, Chairman of PCGA, the government has failed to take concrete steps to address the challenges facing the cotton sector. In Sindh, cotton is currently selling between Rs 16,000 to Rs. 16,500 per maund, while in Punjab, prices range from Rs 16,500 to Rs. 17,000 per maund. Phutti prices have been recorded between Rs. 7,800 to Rs. 8,800 per 40 kg. The federal budget lacks a clear strategy to boost cotton production. Sohail Talat, Chairman of the South Punjab Pakistan Business Forum, emphasized that the government must take effective measures to increase cotton output. He stated that a cohesive agricultural policy and financial support for research are essential for the sector's growth. Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood echoed these concerns, asserting that agricultural development is impossible without proper policy and research investments. In the local cotton market, several ginning factories in the provinces of Sindh and Punjab have partially resumed operations after the extended holidays of Eid-ul-Adha last week, while more factories are preparing to start. The supply of cotton has also been gradually increasing. In the budget, the Textile Sector and the Ginning Sector will see the elimination of the Export Facilitation Scheme (EFS) on the import of cotton and fabric, while ginners were hopeful that several taxes imposed on ginning would be abolished in the budget. However, the budget has only imposed an 18% sales tax on the import of yarn, although APTMA has appreciated these measures. Overall, the ginners have been greatly disappointed, as several taxes imposed on them remain unchanged. This disappointment among ginners will also have a negative impact on cotton growers, who are equally disheartened. The EFS facility is available for the import of cotton and fabric, which will have negative effects on local cotton because an 18% sales tax is imposed on local cotton. As a result, the cotton market will not be able to gain momentum, and this will impact cotton growers. If the price of cotton decreases, the price of cottonseed will also drop. Additionally, if the input costs for cotton growers remain high, there is a risk of reduced cotton cultivation. This year, large groups of mills have already signed a significant number of import contracts for cotton, which will result in relatively lower purchases of local cotton. As a consequence, ginners and cotton farmers will see reduced demand for cottonseed and lint, and they will also not receive fair prices. In the provinces of Sindh and Punjab, the price of cotton currently ranges between 16,000 to 17,000 rupees per maund, while Phutti (40 kg) is being traded at 7,800 to 8,800 rupees. The Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by 500 rupees per maund and closed the spot rate at 16,200 rupees per maund. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said that international cotton prices remained bearish. New York cotton futures closed at 65.30 to 69.06 cents per pound. According to the USDA's weekly export and sales report, sales for the 2024-25 season reached 60,200 bales. Vietnam topped the list by purchasing 28,000 bales. India ranked second with purchases of 18,600 bales, while Pakistan came in third with 6,600 bales. For the 2025-26 season, 36,100 bales were sold. Vietnam again led with 25,100 bales, followed by Turkey in second place with 7,500 bales, and Bangladesh in third with 2,200 bales. Meanwhile, cotton ginning and oil mill industries across Pakistan are experiencing deep disappointment and concern following the federal budget's failure to eliminate the sales tax on cotton and its by-products and to withdraw the exemption on sales tax for imported cotton. This decision comes despite strong recommendations from two committees established by Prime Minister Shehbaz Sharif, raising fears of further factory closures, a significant decline in cotton cultivation, and a sharp drop in cotton prices. Reports indicate a staggering reduction of Rs 1,000 per maund in cotton prices after the budget. Ginners argue that a 'flawed' Export Facilitation Scheme (EFS), introduced several years ago, allowed the duty-free import of cotton, cotton yarn, and grey fabric, while an 18% sales tax was imposed on domestic purchases of these items. Ehsanul Haq, Chairman of the Cotton Ginners Forum, stated, 'This scheme led to the import of millions of cotton bales and cotton yarn, severely damaging the country's foreign exchange reserves.' 'Simultaneously, textile mills stopped purchasing cotton locally, causing a massive drop in the prices of cotton and phutti (seed cotton). As a result, Pakistan's total cotton production for 2024-25 plummeted to a historic low of only 5.5 million bales, with an additional 200,000 bales remaining unsold.' The decline in cotton cultivation has also forced Pakistan to import billions of dollars' worth of edible oil, lamented Junaid Iqbal, another ginner from Punjab. He stated that the EFS has plunged the cotton ginning sector into its worst economic crisis, resulting in the closure of over 800 ginning units and hundreds of oil mills across the country. Haq noted that the exclusion of these recommendations has led to a record drop of Rs. 1,000 per maund in cotton prices within just two days, bringing them down to Rs. 16,000–16,200 per maund, with fears of further declines. Additionally, the Pakistan Cotton Ginners Association has rejected the budget, calling it 'deadly poison' for farmers and the ginning industry. During a telephone conversation with Pakistan's renowned cotton analyst Naseem Usman, Sajid Mahmood, the head of the Transfer of Technology department at the Central Cotton Research Institute Multan, stated that the country's agricultural sector is currently going through a critical phase, where having a clear direction and strategy for sustainable development is absolutely essential. He mentioned that the continuous rise in production costs is becoming a major challenge for farmers, as they neither receive fair prices for their crops nor are provided with easy access to markets. According to Sajid Mahmood, due to the lack of consistent investment in agricultural research and modern technology, most farmers are still forced to rely on traditional farming methods, which directly affects per-acre yield. Sajid Mahmood said that cotton, which was once a strong pillar of Pakistan's economy, textile industry, and rural economy, is now facing a severe crisis. Coordinated efforts and a clear action plan are crucial for its revival. He added that the irrigation system has not kept pace with modern requirements, while the availability of quality seeds, fertilizers, and other agricultural inputs at reasonable prices remains a persistent issue for farmers. He emphasized that the Pakistan Central Cotton Committee (PCCC) is the key institution for cotton research and development in the country. However, unfortunately, billions of rupees in cotton cess dues are still pending from the textile industry. He demanded that these dues be released immediately so that cotton-related research can be strengthened and the scope of advanced research can be expanded further. Sajid Mahmood further stated that the 18% General Sales Tax (GST) on local cotton and its by-products is an unnecessary burden on farmers and the ginning industry, which should be immediately abolished or reduced. These measures would lead to a significant reduction in production costs and promote value addition at the local level. In conclusion, he said that for the development of a crucial sector like agriculture, a comprehensive, long-term, and ground-reality-based policy is indispensable. If experienced agricultural experts and those familiar with ground realities are included in the policymaking process, not only can farmers' difficulties be reduced, but the national economy can also benefit more from this vital sector. Copyright Business Recorder, 2025
Business Recorder
05-06-2025
- Business
- Business Recorder
Punjab seeks tax relief for cotton industry
LAHORE: Punjab Agriculture Minister Syed Ashiq Hussain Kirmani disclosed on Wednesday that talks are underway with the federal government and the prime minister to remove income and sales tax from the cotton industry. He hoped that these taxes will be removed in the 2025-26 budget with the aim to make cotton farming more profitable for growers. The Minister was addressing a delegation of the Pakistan Cotton Ginners Association which called on him at the Agriculture House. Sharing the strategy adopted by the Punjab government this year to enhance sowing of cotton, the Minister informed the delegation that one million acres of land previously used for rice have been shifted to cotton this year. The Minister also threw light on Cotton Campaign 2025–26, early sowing, early operation of ginning factories, cotton pricing, taxation on local cotton, and the enforcement of the Cotton Control Act. During the meeting, the Cotton Ginners Association shared the challenges currently facing the industry. Member of Provincial Assembly Rana Saleem and Punjab Agriculture Secretary Iftikhar Ali Sahoo were also present. Speaking on the occasion, Minister Kirmani said that cotton is Pakistan's main cash crop. Following the vision of Punjab Chief Minister Maryam Nawaz Sharif, the Agriculture Department has introduced effective measures across the province, especially in South Punjab, to revive and stabilize cotton production. As a result, cotton cultivation has improved significantly, and the area under cultivation has increased. He declared this year as the 'year of cotton revival.' To promote cotton farming, the Agriculture Department launched a strong awareness campaign. Between February 15 and March 31, an ambitious goal of sowing cotton on one million acres was set and successfully achieved - a milestone not reached in the last 10 years. So far, cotton has been cultivated on 3.3 million out of the targeted 3.5 million acres, and efforts continue to reach four million acres. The department conducts third-party verification to ensure transparency in meeting targets. The Minister urged ginners to adopt modern technology, noting that many factories still use outdated methods that reduce the international demand for Pakistani cotton. He stressed the need to upgrade ginning processes and assured full government support for introducing new technology in the sector. Punjab Agriculture Secretary Iftikhar Ali Sahoo said that this year, demonstration plots were established in South Punjab where Integrated Pest Management (IPM) techniques were fully implemented. He also noted that the private sector took responsibility for supporting cotton farming at the tehsil level, setting a positive example. Copyright Business Recorder, 2025
Business Recorder
02-06-2025
- Business
- Business Recorder
Weekly Cotton Review: Prices steady, trading activity subdued
KARACHI: The cotton market is showing stability in prices, though trading activity remains subdued. New crop deals for the 2025-26 seasons are being finalized between Rs. 17,200 to Rs. 17,500 per maund, while phutti (seed cotton) is trading at Rs. 8,000 to Rs. 8,500 per 40 kg. According to industry sources, approximately 2,200 bales of the new crop have already arrived at ginning factories across the country. Currently, three ginning factories in Sindh and four in Punjab are partially operational. Market participants anticipate a significant uptick in trading after Eid-ul-Adha. Punjab's Secretary of Agriculture, Iftikhar Ali Soho, reported that the province has achieved 94% of its cotton cultivation target for the current season. Meanwhile, the textile industry has renewed its demand for the abolition of the Export Facilitation Scheme (EFS) and the removal of the 18% sales tax on locally produced cotton. Additionally, calls for eliminating the General Sales Tax (GST) persist, with expectations that the issue may be addressed in the upcoming budget. The Pakistan Cotton Ginners Association (PCGA) and the All Pakistan Textile Mills Association (APTMA) have jointly urged the government to scrap the EFS and abolish the 18% sales tax on domestic cotton. Chairman of the Cotton Ginners Forum (CGF), Ihsan-ul-Haq, warned that the entire cotton sector is grappling with the worst economic crisis in the country's history, stressing the need for immediate policy interventions to revive the industry. During the past week, the local cotton market saw stable prices for cotton. Trading remained limited as the partial arrival of the new cotton crop has begun. Currently, three ginning factories in Sindh province are partially operational, while four ginning factories in Punjab province have also partially started ginning. Partial arrival of phutti (seed cotton) from the lower regions of Sindh has commenced, with approximately 2,200 bales of phutti having reached ginning factories so far. Increased trading activity is expected after Eid-ul-Adha. The government has set a production target of one crore eighteen lakh bales for the new 2025-26 season. Currently, trading in the ongoing season is slow, with cotton prices ranging between 15,000 to 17,500 rupees per maund. Most transactions are being conducted on credit, with deals based on quality and payment conditions. The stock of cotton with ginners is gradually decreasing. Federal Minister for Trade Jam Kamal Khan has stated that the government is seriously working to eliminate the 18% general sales tax on local cotton in order to boost cotton production. He shared this during a press conference on Monday. The PHMA (Pakistan Hosiery Manufacturers Association) has urged the government to reduce electricity tariffs during peak hours to promote exports. In Sindh and Punjab provinces, cotton trading took place between 15,000 to 17,500 rupees per maund, depending on quality and payment conditions. New crop transactions were recorded at 17,000 to 17,500 rupees per maund, while phutti (seed cotton) was sold at 8,000 to 8,800 rupees per 40 kg. The Karachi Cotton Association's Spot Rate Committee maintained the spot rate stable at 16,700 rupees per maund. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said that international cotton prices are experiencing fluctuations. New York cotton prices showed a mixed trend, with futures trading between 65.50 to 69 cents. According to the USDA's weekly export and sales report, 118,700 bales were sold for the year 2024-25. Vietnam remained at the top by purchasing 65,600 bales. Bangladesh secured the second position by buying 17,300 bales, while Turkey ranked third with 12,400 bales. For the year 2025-26, 13,800 bales were sold. Pakistan led the purchases with 7,600 bales, followed by Thailand in second place with 3,500 bales, and Peru in third place with 2,600 bales. Meanwhile, Punjab Agriculture Secretary Iftikhar Ali Sahu has informed the Business Club that cotton cultivation has been completed on over 33 lakh acres in Punjab, and the province has achieved 94% of the set target. He stated this while presiding over a high-level review meeting on the current situation of cotton. Punjab Agriculture Secretary Iftikhar Ali Sahu said that a unique and successful tradition has been established to improve cotton production through phased cultivation. Pakistan's cotton sector is facing its gravest financial crisis in decades, prompting swift government attention after urgent appeals from the Pakistan Cotton Ginners Association (PCGA) and the All Pakistan Textile Mills Association (Aptma). Both associations have launched a high-profile lobbying campaign, writing to Prime Minister Shehbaz Sharif and initiating a nationwide media blitz, demanding the immediate abolition of the Export Facilitation Scheme (EFS) or the removal of sales tax on domestically produced cotton and its by-products. The premier subsequently sought policy recommendations from the Ministry of National Food Security and Research (MNFSR). In response, the ministry has formally endorsed the industry's proposals. In a letter to PCGA President Dr Jassu Mal, Cotton Commissioner Dr Khadim Hussain stated that the government has recommended that the 18pc sales tax on domestic cotton, cottonseed, oilcake, and cottonseed oil be lifted immediately, or that imports of cotton, yarn, and grey cloth be taxed at the same rate. The ministry's recommendations, forwarded to safeguard farmers' incomes, revive local production, and stem Pakistan's soaring dependence on costly cotton imports, it says. The communiqué notes that Punjab has implemented targeted subsidies for farmers to increase their incomes and reduce production costs for various crops. Industry data reveals that textile mills have imported over 300 million kgs of cotton yarn and two million bales of cotton during the first nine months of 2024-25, draining billions of dollars in foreign exchange. Despite this, domestic production has fallen to a historic low of just 5.5m bales. Meanwhile, more than 200,000 bales of unsold cotton and vast stocks of yarn remain idle in factories, with demand at a standstill. Cotton Ginners Forum Chairman Ihsanul Haq says the fallout has been devastating as over 800 ginning units and 120 spinning mills have ceased to function, while hundreds more textile units are barely functioning. 'If the current policy persists, the sector risks total collapse,' he warns, adding that Pakistan may soon be forced to import not only cotton but also edible oil, compounding the country's financial woes. The MNFSR's recommendations underscore the urgency, recommending immediate tax relief for domestic producers or the imposition of equal taxes on imports to restore a level playing field. All eyes are now on the federal government, as the fate of Pakistan's cotton and textile industry hangs in the balance. Copyright Business Recorder, 2025
