ISLAMABAD: Pakistan’s industry is poised to spend over $2 billion this fiscal year on cotton imports to fulfill domestic needs and export textile products, as the crop yield is expected to register a shortfall of around four million bales, an industry stakeholder said on Wednesday.
Cotton is considered the backbone of the national economy, serving as the main raw material for the textile sector, which contributes about 60 percent to the overall exports of the South Asian nation. The cotton industry employs around 15 million people, and the country’s textile and apparel exports were recorded at $16.65 billion during the last fiscal year.
Speaking to Arab News, Zakirullah Khalidi, general secretary of the Pakistan Cotton Ginners’ Association, said cotton bale arrivals in the market had so far registered a reduction of around 63 percent compared to the previous year.
He added that this owed to a heatwave and excessive rains during the cotton-growing period from April to September.
“The industry will have to import cotton worth over $2 billion this fiscal year to fulfill its domestic and export needs,” he said.
Khalidi informed the cotton arrival data would be compiled until April next year, but estimates suggest the production will be around seven million bales, a reduction of at least four million bales from the eleven million bales targeted for this year.
“This is going to be a huge economic loss for the industry and the country as well,” he said, attributing the reduction in yield to climate change.
The industry primarily imports cotton raw material from the United States, Afghanistan and Uzbekistan to address the shortage and meet export orders. Most of Pakistan’s cotton is grown in the southern part of Punjab province, while the rest comes from Sindh province.
Sajid Mahmood, head of the transfer of technology department at the government-run Central Cotton Research Institute in Multan, said the ideal temperature for cotton fruiting and growth in Pakistan is around 35-40 degrees Celsius, but this year, temperatures rose to 48 degrees Celsius for a prolonged period in the cotton-growing regions.
“Pakistan doesn’t have a single cotton variety that can survive with good yield above 43 degrees Celsius,” he told Arab News, adding the institute has produced a new seed variety known as CYTO547 that can withstand temperatures above 48 degrees Celsius, though it is still in the trial phase.
Mahmood said erratic weather patterns during the cotton growing season had provided a suitable breeding ground for various pests, which are expected to damage over 1.5 million bales of the crop.
“Farmers are also switching to other cash crops as cotton is no longer profitable,” he said. “Therefore, the cultivation area has also reduced significantly.”
In Punjab alone, the cotton sowing area shrank from 4.4 million acres to 3.2 million acres this year, as farmers switched to sesame, sugarcane and paddy crops for better profits, he said.
“The sesame crop area has increased from 0.8 million acres last year to 1.7 million acres this year, as it is now considered a cash crop in the southern parts of Punjab,” he said.
Babar Bilal, a cotton grower in Rahim Yar Khan, said cotton yields have declined significantly in the last couple of years due to erratic weather patterns, pests and low-quality seeds.
“Farmers are switching to other crops like paddy and sesame to earn better profits as cotton is no longer a cash crop for the growers,” he told Arab News.
Pakistan to spend $2 billion on cotton imports amid low production
https://arab.news/2nhpc
Pakistan to spend $2 billion on cotton imports amid low production
- Industry stakeholders expect a shortfall of four million bales due to heatwave, excessive rains this year
- Pakistan does not have a single cotton variety that can survive above 43 degrees Celsius with good yield
IMF warns against policy slippage amid weak recovery as it clears $1.2 billion for Pakistan
- Pakistan rebuilt reserves, cut its deficit and slowed inflation sharply over the past one year
- Fund says climate shocks, energy debt, stalled reforms threaten stability despite recent gains
ISLAMABAD: Pakistan’s economic recovery remains fragile despite a year of painful stabilization measures that helped pull the country back from the brink of default, the International Monetary Fund (IMF) warned on Thursday, after it approved a fresh $1.2 billion disbursement under its ongoing loan program.
The approval covers the second review of Pakistan’s Extended Fund Facility (EFF) and the first review of its climate-focused Resilience and Sustainability Facility (RSF), bringing total disbursements since last year to about $3.3 billion.
Pakistan entered the IMF program in September 2024 after years of weak revenues, soaring fiscal deficits, import controls, currency depletion and repeated climate shocks left the economy close to external default. A smaller stopgap arrangement earlier that year helped avert immediate default, but the current 37-month program was designed to restore macroeconomic stability through strict monetary tightening, currency adjustments, subsidy rationalization and aggressive revenue measures.
The IMF’s new review shows that Pakistan has delivered significant gains since then. Growth recovered to 3 percent last year after shrinking the year before. Inflation fell from over 23 percent to low single digits before rising again after this year’s floods. The current account posted its first surplus in 14 years, helped by stronger remittances and a sharp reduction in imports. And the government delivered a primary budget surplus of 1.3 percent of GDP, a key program requirement. Foreign exchange reserves, which had dropped dangerously low in 2023, rose from US$9.4 billion to US$14.5 billion by June.
“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said in a statement after the Board meeting.
But he warned that Islamabad must “maintain prudent policies” and accelerate reforms needed for private-sector-led and sustainable growth.
The Fund noted that the 2025 monsoon floods, affecting nearly seven million people, damaging housing, livestock and key crops, and displacing more than four million, have set back the recovery. The IMF now expects GDP growth in FY26 to be slightly lower and forecasts inflation to rise to 8–10 percent in the coming months as food prices adjust.
The review warns Pakistan against relaxing monetary or fiscal discipline prematurely. It urges the State Bank to keep policy “appropriately tight,” allow exchange-rate flexibility and improve communication. Islamabad must also continue raising revenues, broadening the tax base and protecting social spending, the Fund said.
Despite the progress, Pakistan’s structural weaknesses remain severe.
Power-sector circular debt stands at about $5.7 billion, and gas-sector arrears have climbed to $11.3 billion despite tariff adjustments. Reform of state-owned enterprises has slowed, including delays in privatizing loss-making electricity distributors and Pakistan International Airlines. Key governance and anti-corruption reforms have also been pushed back.
The IMF welcomed Pakistan’s expansion of its flagship Benazir Income Support Program, which raises cash transfers for low-income families and expands coverage, saying social protection is essential as climate shocks intensify. But it warned that high public debt, about 72 percent of GDP, thin external buffers and climate exposure leave the country vulnerable if reform momentum weakens.
The Fund said Pakistan’s challenge now is to convert short-term stabilization into sustained recovery after years of economic volatility, with its ability to maintain discipline, rather than the size of external financing alone, determining the durability of its gains.
