Pakistan faces a cotton import bill of around $2 billion in the current financial year 2026-27. Domestic production is projected to fall to just 4.9 million bales. According to a recent US Department of Agriculture report, output will remain far below the government’s target of 9.6 million bales. Meanwhile, the local spinning industry requires around 10 million bales annually.

Therefore, Pakistan may need to import more than 5 million cotton bales to meet industrial demand. The imports are estimated to cost around $2 billion, or Rs. 600 billion. Discussing the report, FPCCI Policy Advisory Board Chairman Mian Zahid Hussain said the decline would add pressure on Pakistan’s foreign exchange reserves.

Moreover, he said the money that could have gone to local farmers would instead go to foreign producers. He said the government needs to take urgent steps to revive cotton production. Additionally, it should support cotton ginners, farmers and the textile industry.

Pakistan’s cotton production has already stayed well below earlier levels. Production stood at around 7 million bales in FY2023-24, before falling to 5 million bales in FY2024-25. It remained at around 5.6 million bales in FY2025-26. However, cotton imports still reached about 6 million bales that year.

Mian Zahid said the continuous decline links largely to a drop in the area under cotton cultivation. This area has fallen by around 33 percent over the past decade. Furthermore, he pointed to high industrial energy costs as another challenge for the sector. According to him, industries in neighbouring countries pay around 8 cents per unit for electricity, compared with around 14 cents per unit in Pakistan.

He supported demands to shift sugar mills out of cotton-growing zones. He also backed calls to remove sales tax on cotton and related by-products and eliminate fixed taxes in electricity bills. Therefore, he urged full implementation of the Cotton Control Act as well.

Finally, Mian Zahid Hussain called for the government to launch the proposed “Grow Cotton, Save Economy” campaign on an emergency basis. He also asked officials to grant the ginning sector industrial status. This step would let it access electricity and gas at competitive industrial rates.