Pakistan no longer self-sufficient in cotton as imports surge: EMPAK Strategies report

ISLAMABAD: Pakistan has lost its long-standing self-sufficiency in cotton and is now increasingly dependent on costly imports, a shift that is placing mounting pressure on foreign exchange reserves and raising concerns about the future of the country’s largest export industry, according to a new report by EMPAK Strategies.

Pakistan’s cotton sector has shown signs of recovery in the 2024–25 season, but deep-rooted structural weaknesses and climate pressures continue to pose serious risks to long-term stability, as per the report.

The study notes that while the area under cultivation has expanded compared with recent years, it remains significantly below levels recorded a decade ago, highlighting the sector’s incomplete recovery from a prolonged downturn.

Cotton production during the current season is estimated at about 5 million bales, marking a modest rebound after output fell sharply in earlier years.

Production had declined from around 7 million bales in 2015–16 to approximately 3.9 million bales in 2022–23, reflecting a combination of environmental shocks, policy gaps, and shifting cropping patterns.

Researchers say the recovery is fragile and insufficient to restore the country’s previous position as a largely self-sufficient producer. Pakistan now relies heavily on imports to meet domestic demand, purchasing cotton worth an estimated $2–3 billion annually.

This dependence places additional strain on foreign exchange reserves and increases input costs for the textile sector, the country’s largest export industry.

Analysts warn that rising import reliance could erode Pakistan’s competitiveness in global textile markets, particularly as rival producers benefit from more stable domestic supply chains.

Climate change is identified as one of the most significant threats to cotton production. Rising temperatures, erratic rainfall patterns, water shortages, and growing pest resistance have reduced yields per hectare across major cotton-growing regions.

The report projects that average temperatures in these areas could increase by 1.5 to 2 degrees Celsius by 2040. Such changes may intensify heat stress on crops, disrupt planting cycles, and increase water demand at a time when irrigation resources are already under pressure.

Extreme weather events have also played a role in recent volatility. Flooding, heatwaves, and prolonged dry spells have damaged crops and discouraged farmers from planting cotton in favour of less risky alternatives, including sugarcane, maize, and rice.

Beyond environmental factors, the study highlights governance and institutional shortcomings that have compounded the crisis. Weak regulation of seed quality has allowed substandard varieties to circulate in the market, undermining productivity and resilience. Inadequate agricultural extension services have limited farmers’ access to modern cultivation techniques and timely advisory support.

Poor pest surveillance systems have further increased vulnerability to outbreaks, while limited crop insurance coverage has left growers exposed to financial losses during adverse seasons. The absence of robust traceability mechanisms also restricts Pakistan’s ability to meet evolving international standards for sustainable and transparent supply chains.

Researchers emphasise that fragmented coordination between federal and provincial authorities has slowed the implementation of coherent policies for the sector. Overlapping responsibilities and inconsistent programmes have hindered long-term planning and investment.

To address these challenges, the report recommends a range of reforms aimed at modernising cotton production and strengthening the value chain. Proposed measures include cluster-based farming to improve efficiency, digital monitoring systems for crop management, performance-linked financial incentives for farmers, and stronger integration between producers, ginners, and textile manufacturers.

Experts argue that improving research and development, upgrading seed technology, and expanding mechanisation will be essential to reversing yield declines. Enhanced water management practices and climate-resilient crop varieties are also seen as critical for adapting to changing environmental conditions.

The study cautions that without comprehensive and timely intervention, production volatility is likely to persist, further deepening reliance on imports. Such a scenario could have far-reaching consequences for rural livelihoods, industrial output, and the country’s balance of payments.

Cotton has historically been a cornerstone of Pakistan’s agricultural economy and a key input for its textile exports. Any sustained weakening of the sector could therefore ripple across multiple industries, affecting employment, export earnings, and economic growth.

The report concludes that restoring the sector’s vitality will require coordinated action from government institutions, private stakeholders, and farmers.

Without systemic reforms, it warns, Pakistan’s cotton industry may struggle to regain its former strength, leaving the economy increasingly exposed to external supply shocks and rising production costs.