Pakistan achieved a remarkable feat by reducing its cotton imports bill to $2.4 billion in FY23-24, as the domestic production revived. 

According to annual projections for 2023-24, cotton imports may not even secure a spot in the country's top 10 import categories.

However, this remarkable feat was achieved amidst challenging economic circumstances, including strict central bank restrictions imposed due to a foreign exchange liquidity crisis.

The average burrowing cost for the entire year is expected to remain significantly above 15 per cent, says Muhammad Sualeh Ahmad Faruqui, Secretary of Commerce.  

The industry also suffers from the discontinuation of concessionary financing schemes and tightening of subsidised energy tariffs, he adds. 

Over the past three fiscal years, Pakistan’s cotton import bill averaged $2.25 billion annually, making it the fifth-largest imported component by the country. 

However, despite this, Pakistan is unlikely to meet cotton output target in this marketing year as production is likely to remain a million bales below the average production from FY18 to FY22, adds Faruqui. 

Contrasting global economic trends, with plummeting cotton prices and a potential recession in key export destinations also make the future of Pakistan’s spinning industry uncertain.

However, if Pakistan’s cotton production in the current year reaches the same level as that in FY21-22, its imports will remain restricted to 4.5 million bales. This will enhance the total domestic supply to 13 million bales, adds Faruqui

Demand for imported cotton in the local market has declined, avers Faruqui. Though the frequent shortfalls in domestic production necessitate imported cotton, a surge in demand in recent years, have boosted industry prospects, he adds.