Pakistan’s textile sector is preparing for a significant supply gap, with industry estimates indicating the need to import approximately 7.2 million cotton bales in the 2026–27 season.
The projected imports come as domestic cotton production is expected to decline further, intensifying pressure on an industry already facing rising costs and policy challenges.
Production Declines While Demand Remains High
According to estimates from the United States Department of Agriculture, Pakistan’s cotton output is forecast at 6.94 million bales, each weighing 160 kilograms—down by 272,000 bales compared to the previous year.
In contrast, domestic consumption is projected at 14.15 million bales, creating a substantial supply deficit that must be met through imports. However, actual demand levels may vary depending on government policy decisions and the operating capacity of textile mills.
Global Market Context
The USDA report also highlights broader global dynamics, with China expected to remain the world’s largest cotton producer at 45.6 million bales, followed by India, Brazil, and the United States.
These global supply trends will play a key role in determining Pakistan’s import costs and sourcing strategies in the coming months.
Ginning Season Begins Slowly
The new cotton ginning season in Pakistan has started gradually, with a limited number of factories becoming operational in Punjab and Sindh. Industry participants expect activity to accelerate after Eid, when cotton arrivals typically increase.
Prices in the domestic market have remained relatively stable so far, though stakeholders anticipate clearer price trends once supply volumes improve.
Industry Calls for Tax Relief
Industry representatives have raised concerns over high taxation and production costs, warning that these factors are undermining competitiveness.
Ihsanul Haq, Chairman of the Cotton Ginners Forum, criticized the high sales tax burden on the sector and urged the government to remove taxes on cottonseed and related products in the upcoming budget.
He argued that such measures could encourage local cotton production, reduce reliance on imports, and help stabilize prices for consumers.
Also Read: Pakistan’s Textile and Apparel Exports to China Show Resilience and Diversification in 2025
Mounting Pressure on Textile Manufacturers
Beyond raw material shortages, Pakistan’s textile industry is facing broader economic challenges, including high energy costs, interest rates, and taxation compared to competing countries.
Industrial stakeholders are calling for comprehensive policy support, including the removal of super tax and other financial relief measures, to restore production capacity and maintain export competitiveness.
A Critical Moment for the Sector
The widening gap between cotton supply and demand highlights structural challenges in Pakistan’s textile value chain. Without targeted reforms and investment, reliance on imports is likely to increase, putting additional pressure on foreign exchange reserves.
As the government prepares its upcoming budget, the textile industry’s demands for policy support are expected to play a central role in shaping the sector’s future trajectory.
