LAHORE: A major Chinese cotton yarn exporting firm has reportedly opened its office in Faisalabad’s Sooter Mandi (yarn market) to facilitate large-scale sales to Pakistani textile mills and traders.
This move comes amidst revelations that certain traders and textile mills have been importing millions of kilograms of cotton yarn monthly from China and other countries by under invoicing.
The situation has exposed a critical imbalance in the country’s economic policy: while cotton products imported into Pakistan face lower taxes compared to other countries, the local textile and cotton industry is burdened with the world’s most expensive electricity and gas tariffs, along with excessive taxes.
This disparity is plunging the domestic industry into its worst-ever economic crisis, leading to the shutdown of hundreds of textile mills and ginning factories, including large groups. The resulting continuous decline in exports and massive increase in imports is pushing the national economy towards decline.
Move sparks concerns of undermining local industry; ginners want cut in power tariff, taxes
A recent investigation by the All Pakistan Textile Mills Association (APTMA) uncovered that imported cotton yarn is being declared at prices much lower than the actual cost to evade import duties.
The textile millers’ body had previously written to the Federal Board of Revenue (FBR), revealing that traders are importing cotton yarn that typically costs between$3.42 and $4.14 per kg by declaring its price as low as$2.25 to $3.80 per kg. A large portion of these imports is being declared at around $2.75 per kg, continuously undermining the domestic spinning industry.
APTMA urged the FBR in its letter to conduct a thorough investigation into this issue to help revive the local cotton industry.
Due to the relatively cheaper price of Chinese cotton yarn compared to domestic produce, imports have surged. The move by a major Chinese cotton yarn exporting firm to open its office directly in Faisalabad’s market is being viewed with apprehension, as it is expected to further boost Chinese sales to Pakistani mills.
Cotton Ginners Forum Chairman Ihsanul Haq has called upon the government to take immediate action to support the entire cotton industry, including textile mills, by announcing record reductions in electricity and gas tariffs and lowering taxes. This, he argued, is essential to fully activate the domestic cotton industry, increase exports, and strengthen the national economy.
He also highlights reports suggesting that the Ministry of Food Security has proposed to the federal government to immediately lift the ban on establishing new sugar mills across the country. He expresses strong fears that approving this proposal will lead to the widespread establishment of new sugar mills, further reducing the area dedicated to cotton cultivation.
This reduction will necessitate spending billions of dollars in foreign exchange on importing both raw cotton and edible oil, severely weakening the national economy. He urges the government not to approve the proposal.
In a separate development, a prominent Netherlands-based organization, “OCA” (Organic Cotton Accelerator), which promotes organic practices globally, organised a major conference in Lahore last week to promote organic cotton in Pakistan, following its efforts in India. Cotton stakeholders from across the country participated in the event.
Sources indicate that OCA has initially decided to offer a premium to farmers for cultivating non-BT organic cotton in Balochistan and Sindh to encourage large-scale organic cotton farming in Pakistan.
Published in Dawn, November 24th, 2025