The International Cotton Association (ICA) has labelled 84 Pakistani textile mills defaulters. Ahsanul Haq, chairman of the Cotton Ginners Forum, about the ICA’s action in response to these mills not fulfilling their procurement contracts. Consequently, these defaulting mills are now barred from importing cotton globally.
Pakistan Cotton Ginners Association’s data reveals that by the end of November 2024, Pakistan had produced only 5.2 million cotton bales, a 33 per cent decrease from the previous year’s corresponding period. Despite initial projections of a price increase due to this reduced output, the actual prices of cotton and bales declined. This reduction occurred as textile mills began importing cotton and thread internationally, influenced by an 18 per cent sales tax levied on them.
According to the cotton statistics released by the Pakistan Cotton Ginners Association (PCGA) as of November 30, 2024, the total cotton arrivals in Pakistan this year was 5,190,725 bales, representing a decline of approximately 33.06% compared to 7,753,473 bales in 2023.… pic.twitter.com/cCFNJTde7d
— Business Recorder (@brecordernews) December 4, 2024This price drop in cotton products raises concerns among ginners and growers, potentially leading to further declines in domestic cotton production.
Haq has urged the government to eliminate the 18 per cent sales tax on cotton and thread purchases to bolster the local cotton industry and curb the outflow of foreign exchange due to imports.
