Cotton Imports Surge 114% – Pakistan Business News
- Pakistan's cotton import bill has ballooned, climbing 114% in the first 10 months of fiscal year 2025 compared to the previous year, driven by a sharp decline in...
- From July to April, the nation's cotton imports reached $2.545 billion, a meaningful increase from the $1.189 billion recorded during the same period last year.
- This increase in cotton imports could threaten Pakistan's efforts to maintain a positive current account balance by the end of FY25, especially after the country recorded a record...
Pakistan’s cotton import bill has dramatically surged, leaping 114% in the last ten months due to plummeting local cotton production. This sharp rise, reaching $2.545 billion, now threatens Pakistan’s export-driven economy and trade balance, a worrying trend revealed by recent State Bank of Pakistan data. The textile sector, which depends on cotton imports, faces notable hurdles, from high electricity tariffs to supply shortages that compromise export potential. To combat these challenges, Pakistan is actively negotiating with the U.S. to secure trade relief.News Directory 3 reports on the details of these critical discussions. Discover what’s next for Pakistan as it navigates this textile crisis.
Pakistan’s Cotton Imports Surge Amid Falling Local Production
Updated June 1, 2025
Pakistan’s cotton import bill has ballooned, climbing 114% in the first 10 months of fiscal year 2025 compared to the previous year, driven by a sharp decline in domestic cotton production. The State Bank of Pakistan (SBP) reports that this surge in cotton imports is straining the economy and negatively impacting exports.
From July to April, the nation’s cotton imports reached $2.545 billion, a meaningful increase from the $1.189 billion recorded during the same period last year. Initial estimates projected cotton imports around $1.9 billion for the fiscal year, but dwindling domestic lint production has pushed the import bill even higher.
This increase in cotton imports could threaten Pakistan’s efforts to maintain a positive current account balance by the end of FY25, especially after the country recorded a record trade deficit in April. While the current account shows a surplus of $1.88 billion for the first 10 months of FY25, the rising cost of cotton imports presents a challenge.
SBP data indicates that cotton imports have already surpassed the total figure for the entire FY24, increasing by 58.4% compared to the $1.6 billion imported then. Official figures reveal that cotton production has plummeted to roughly one-third of its peak of 14 million bales. Experts believe this drastic reduction is a primary factor hindering export growth, despite some progress in other areas.
To mitigate the impact of tariffs, Pakistan is in negotiations with the U.S. government to secure relief by importing US cotton and soybeans. The U.S. represents Pakistan’s largest export market, and importing American products is a strategic move to reduce the existing $3 billion trade surplus and safeguard exports.
the textile sector, which accounts for 54% of Pakistan’s total exports, faces additional challenges. High electricity tariffs, the highest in the region, have already forced numerous textile units to shut down. The combination of domestic cotton shortages and elevated costs makes it unlikely that textile exports will exceed the $16.6 billion recorded in FY24.
What’s next
Pakistan will likely continue to rely heavily on cotton imports in the near term.The government’s focus will be on securing favorable trade terms with the U.S. and addressing the underlying issues affecting domestic cotton production to alleviate the burden on the economy.