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ISLAMABAD/LAHORE: National Food Security Minister Rana Tanveer Hussain said on Monday that the government was working to reform the cotton sector, including reviewing the 18 per cent GST on local lint to create a fairer market environment.
Meanwhile, the Pakistan Cotton Ginners Association (PCGA) reported a 34pc decline in production against the target set for 2024-25.
The minister also announced that the National Cotton Revival Conference in Multan will be held on Tuesday, where key stakeholders will discuss strategies for enhancing cotton productivity and trade.
Mr Tanveer reiterated that his ministry remains committed to enhancing cotton production, supporting farmers, and implementing sustainable agricultural practices. The government will continue working closely with international partners like the International Cotton Advisory Committee (ICAC) to strengthen Pakistan’s position in the global cotton market and ensure long-term growth.
An ICAC delegation led by Executive Director Eric Trachtenberg met with the minister to discuss cotton production, trade, and textile sector development.
Lint production falls 34pc
The country produced cotton that was around half of the target set for the crop year 2024-25 and 34pc less than the output for the same period last year, PCGA data showed on Monday.
It says that up till Jan 31, over 5.5 million bales of cotton were produced, almost 50pc of the 11.2m bales target fixed by the Federal Committee on Agriculture for the ongoing crop year.
Despite this, cotton and cotton yarn stocks lying with the ginning factories and spinning mills are much higher than last year. There are 486,000 bales of cotton available for sale with the ginning units, 114,000 bales (31pc) more than last year.
During this period, the local cotton market witnessed a significant decline in cotton purchases by the textile mills from ginning factories. The textile industry purchased a record 2.7m bales (35pc) less from ginning units than last year.
The main reason for this is the permission to import cotton and cotton yarn free of tax, while 18pc sales tax is imposed on the purchase of domestic cotton. Thus, this year, textile millers purchased less cotton and yarn from the domestic market.
Reports suggest that 1.5 million bales of cotton have been imported from abroad, while agreements to import 3.5m more cotton bales have been signed. It is believed that around 5m bales of cotton will be imported over and above the import of cotton yarn and grey cloth this year.
Amjad Mahmood in Lahore also contributed to this report
Published in Dawn, February 4th, 2025
Amin Ahmed is an Islamabad-based correspondent for Dawn with nearly two decades of experience in the field. He reports on socio-economic development, agriculture, and privatisation, as well as parliamentary committees.
