LAHORE: In an unprecedented development in Pakistan’s history, local textile mills have begun massive cotton imports from the United States even before the start of the new cotton ginning season, as the country has virtually run out of cotton stocks, triggering a sharp surge in domestic cotton and phutti prices.

Reports suggest that local textile mills have purchased an extraordinary 206,100 bales – around 95pc– of the total 216,000 bales of the US 2026-27 cotton crop sold during the past week. The millers are also importing cotton on a large scale from Brazil.

During fiscal year 2026-27, the country may spend billions of dollars in foreign exchange on the import of cotton and edible oil, potentially the highest import bill in the country’s history for these commodities.

Despite repeated announcements regarding cotton revival, the approval of another sugar mill in Rahim Yar Khan, Pakistan’s largest cotton-producing zone, is undermining efforts to restore cotton cultivation.

Sugar mills in cotton belt, other anti-cotton policies among the causes of production decline

The Karachi Cotton Association (KCA), one of the two major institutions representing Pakistan’s cotton sector globally, is sealed since Dec 12, 2025 due to an alleged ownership dispute, leaving the country without representation in international cotton markets.

Another worrying development is the construction of a gymkhana club at the Central Cotton Research Institute (CCRI) lands, once renowned for developing the subcontinent’s first virus-free cotton variety.

Cotton Ginners Forum Chairman Ihsanul Haq says the Pakistan Cotton Ginners Association (PCGA) has proposed abolition of sales tax on cotton, cottonseed, cottonseed oil, oil cake and oil dirt in the upcoming federal budget. Meanwhile, the All Pakistan Textile Mills Association (APTMA) has sought the withdrawal of super tax and other levies, alongside reductions in energy tariffs and markup rates.

The textile industry also wants implementation of the cotton revival programme finalised under the leadership of Deputy Prime Minister Ishaq Dar to increase cotton production and eliminate undocumented business practices in the cotton sector.

The new cotton year has started with record-high prices across the cotton value chain. Cotton prices have climbed to Rs23,000 per maund, phutti to Rs12,500 per 40kg, cottonseed to Rs5,200 per maund and oil cake to Rs4,800 per maund – all historic highs in Pakistan.

However, market observers believe prices may begin easing after Eidul Azha holidays as a large number of ginning factories in Punjab and Sindh are expected to become operational.

The partial arrivals of imported cotton have resumed after prolonged disruption caused by the Gulf conflict. Reports of improving Iran-US relations and Chinese mediation in easing Pakistan-Afghanistan tensions could reopen the Afghan border, potentially allowing around 300,000 cotton bales from Afghanistan into Pakistan.

Published in Dawn, May 25th, 2026