KARACHI: Pakistan’s cotton sector is grappling with a perfect storm of challenges as flooding devastates crops across major agricultural provinces while market volatility creates uncertainty for traders and farmers alike.
The cotton market is currently displaying contradictory trends that have left stakeholders puzzled. While cotton prices have surged by a notable 9 percent, the overall market sentiment remains bearish, with spot rates dropping by 200 rupees. This unusual combination has created anxiety among both traders and farming communities who are struggling to interpret these market signals.
Industry analysts attribute these conflicting price movements to a complex interplay of factors including climate change impacts, natural disasters, and shifting international market dynamics. Agricultural specialists warn that these mixed signals indicate serious disruptions in Pakistan’s cotton production and supply chain infrastructure.
The most immediate threat to Pakistan’s cotton industry comes from widespread flooding that has severely impacted agricultural areas across Punjab province. Preliminary damage assessments reveal extensive destruction to standing crops in multiple districts, though officials caution that comprehensive loss evaluations can only be completed once floodwaters fully recede.
The situation in Sindh province presents even greater concerns, where flood risks remain elevated and cotton crops face continued threats. The Pakistan Meteorological Department has issued warnings predicting additional rainfall in the coming days, raising fears of further agricultural losses.
This year’s crisis represents the latest chapter in Pakistan’s ongoing cotton industry decline. The sector has been battling a series of interconnected challenges including climate change effects, increased pest infestations, and now catastrophic flood damage. Agricultural experts emphasise that these problems extend beyond the current growing season, representing a multi-year trend of deteriorating conditions.
The industry’s struggles have been compounded by inadequate access to international-standard seeds, limited adoption of modern farming techniques, and significant gaps in irrigation infrastructure. Government data indicates that anticipated production declines will have far-reaching consequences for both Pakistan’s national economy and its crucial textile manufacturing sector.
The agricultural crisis threatens to impose substantial financial burdens on Pakistan’s economy. Industry projections suggest that flood-related crop losses could force the country’s textile sector to absorb an additional USD 3 billion in cotton import costs. This massive expense would strain the national treasury while undermining the export industry’s competitive position in global markets.
Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood’s analysis points to a fundamental breakdown in research and development as the underlying cause of Pakistan’s cotton industry decline. He argues that the deterioration of agricultural research programs has halted progress in critical areas including new variety development, disease resistance, and productivity enhancement methods.
The local cotton market witnessed a predominantly bearish trend during the past week. Following recent rainfall in Sindh province, a significant increase in cotton supply led to a notable rise in overall cotton production.
According to the Pakistan Cotton Ginners Association (PCGA) report dated August 31, cotton production reached 870,002 bales compared to 773,091 bales during the same period last year, reflecting a 12.54 percent increase in Sindh province.
Punjab province also recorded modest growth, with production totalling 465,570 bales versus 452,855 bales in the previous year, marking a 2.81 percent increase.
The country’s total cotton production during this period reached 1,335,632 bales, compared to 1,225,946 bales in the corresponding period last year, representing an overall increase of approximately 8.95 percent.
The increased supply from improved weather conditions in Sindh has contributed to downward pressure on cotton prices in the domestic market, creating a bearish sentiment among traders and stakeholders in the cotton industry.
Pakistan’s cotton industry is grappling with unprecedented challenges this season as extreme weather conditions, flooding, and pest attacks have severely impacted the crucial cash crop, leading to significant price declines across major producing regions.
According to various sources, while there has been some initial improvement in crop conditions, this does not reflect the overall seasonal outcomes due to seasonal effects and flood damage severely affecting production.
The cotton crop has faced extraordinary challenges this year, including severe weather conditions, intense rainfall, heat waves, flooding, and water scarcity that have put immense pressure on this important cash crop.
Leaf curl virus disease and pink bollworm attacks have further damaged the crop, while reduced usage of fertilisers during the current season, particularly phosphorus, SOP, urea, and nitrogen-based fertilizers, has further worsened the situation.
Initially, fruiting conditions were better, but heat waves in June and July, coupled with water shortages, led to fruit shedding and stunted plant growth.
According to Sajid Mahmood, flooding has made the situation even more critical. Conservative estimates suggest that rice production in Punjab could be affected by up to 60 percent, sugarcane by 30 percent, and cotton by 35 percent.
So far, standing crops in more than 2,100 villages have been destroyed, and billions of rupees worth of agricultural infrastructure has been affected. Thousands of acres of cotton in Pakpattan, Vehari, Bahawalnagar, Bahawalpur Tehsils, and Rajanpur have been submerged, while this agricultural region of southern Punjab holds key importance for national cotton production.
During the week, cotton prices dropped by 500 to 700 rupees per maund. In Sindh province, cotton prices fell from 16,200 rupees to a lower level of 15,500 rupees per maund, while in Punjab province, cotton prices decreased from 16,300-16,500 rupees to 15,800-16,000 rupees per maund.
Similarly, there was an overall reduction of 500 to 600 rupees per 40 kilograms in Phutti prices.
In Balochistan province, cotton prices remained at 15,600 to 15,700 rupees per maund, Phutti prices were 6,900 to 7,200 rupees. In Khuzdar, Phutti prices were 8,500 to 8,600 rupees per 40 kg.
The Karachi Cotton Association’s Spot Rate Committee reduced the spot rate by 200 rupees per maund, closing the spot rate at 15,800 rupees per maund.
According to Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, New York cotton futures remained dominated by bearish sentiment, with prices trading between 64.69 to 70.00 American cents per pound.
The latest USDA weekly export and sales report revealed significant trading activity for the 2025-26 season, with total sales reaching 245,000 bales.
Vietnam emerged as the top buyer, purchasing 109,700 bales, followed by India with 53,800 bales in second place. China secured the third position with purchases of 35,200 bales.
Pakistan’s textile manufacturers expect cotton imports to surge to as much as USD 3 billion this year, double last year’s bill, after floods devastated key growing areas in Punjab and now threaten Sindh, industry officials and analysts said.
The monsoon deluges, which have already swamped central Punjab, the nation’s breadbasket, are moving south toward Sindh, the country’s second-largest cotton belt, raising fears that further damage to fields will deepen losses in the days ahead. Agriculture makes up nearly a quarter of GDP and employs almost half of the labour force, according to the Pakistan Bureau of Statistics.
“Probably, our cotton import can exceed USD 2.5 to USD 3 billion this year alone,” said Kamran Arshad, chairman of the All Pakistan Textile Mills Association (APTMA), adding that millers imported USD 1.5 billion worth of cotton last year from Brazil, the United States, Africa and Australia.
Arshad said cotton-growing areas in central Punjab such as Vehari, Mailsi, Chichawatni and Burewala had been “negatively affected,” while some genetically modified Bt cotton crops were also under water. “This can lead to a crisis, because a lot of people will be losing their livelihoods. Their crops will be at stake,” he said, urging the government to declare a national emergency and curb luxury imports to conserve foreign exchange.
He also blamed record water releases from upstream India for compounding the devastation. Under the 1960 Indus Waters Treaty, India controls the eastern rivers but is required to notify Pakistan of dam discharges that can cause downstream flooding.
Flood damage has also undermined projections for Pakistan’s top export industry, which earned $18 billion last year.
“We were projecting a growth in textile exports from $18 billion to up to $20 billion in the coming year, but I don’t think that level will be achieved because of the unavailability of cotton and the higher cost of production,” said noted analyst Ahsan Mehanti.
He estimated the industry could face a USD 6 billion hit, including about USD 4 billion in additional import costs and USD 2 billion in lost export potential. “This flood will have a devastating impact not only on cotton output but the exchange rate will equally be impacted,” Mehanti said.
Analysts warn that Pakistan may lose up to five million bales from this year’s 10.2 million bale production target, with overall output falling below last year’s seven million. “The government’s target to produce 5.5 million bales in Punjab does not seem achievable now … cotton output may not exceed 4.5 million bales if flooding increases,” said Naseem Usman, chairman of the Karachi Cotton Brokers Forum.
Official data confirm the downturn. Pakistan’s cotton production as of August 15 had already contracted by more than 17 percent to 887,401 bales, compared with 1.1 million a year earlier, according to a September 2 report by the Pakistan Central Cotton Committee.
Usman said consumption would remain higher than domestic output, forcing Pakistan to rely heavily on imports that could exceed USD 2 billion, including raw cotton, seed and oil for animal feed.
Since its establishment, the Pakistan Central Cotton Committee (PCCC) has served as the central institution for cotton research and development in the country, maintaining a coordinated and organised national research structure.
Over time, as the institution faced weakening and challenges, a gradual decline in cotton production began. The first significant setback occurred when the cotton cess was discontinued, which had provided essential financial resources for research and development.
Subsequently, key forums related to cotton, such as the Cotton Crop Management Group, were moved from PCCC’s research institutions to platforms that were not directly involved with cotton research or practical issues. This disrupted the linkage between research and field application, leaving farmers without timely scientific guidance. Similarly, several of PCCC’s other subcommittees were unable to operate at full capacity, leading to delays in critical research and technical decisions, and affecting timely decision-making at the national level.
The situation was further complicated by the fact that various agricultural educational institutions continued to receive substantial funds over the years for multiple cotton projects, yet no significant outcomes emerged. These institutions did not produce notable cotton varieties suitable for farmers, nor did they develop technologies directly beneficial to farmers, while genuine research institutes could not progress to their full potential due to limited resources.
Another major challenge arose from the prolonged lack of recruitment and promotions for agricultural scientists within PCCC. As senior scientists retired, new talent was not inducted, creating a gap that disrupted decades of continuous research. Valuable experience and scientific knowledge could not be passed on to the new generation, which significantly affected cotton research and innovation.
During this period, activities of certain individuals aiming to promote their own seed businesses rather than advancing agricultural research also contributed to the situation. They formed networks within and outside the institution whose purpose was personal gain rather than national interest. This weakened the national research structure and accelerated the decline in cotton production.
Copyright Business Recorder, 2025
