- Higher arrivals highlight gap between supply, industrial demand
- Mill closures could intensify competition in regional textile markets
Pakistan’s cotton market is showing contrasting signals, with higher arrivals at ginning factories coinciding with mounting pressure on the textile industry. In the 2026-27 cotton season (August 2026-July 2027), cumulative arrivals have reached 4.08 million bales till 15 October 2026, up 7.53% y-o-y, according to the Pakistan Cotton Ginners Association. However, rising production costs, weak demand, and competition from imported yarn and fabrics have contributed to widespread closures of ginning factories and textile mills. Adverse weather has also raised concerns over final crop yields.
Higher arrivals, uncertain demand
Pakistan’s rising arrivals indicate increased raw cotton availability but do not necessarily signal a larger final crop or weaker prices. Textile mills had purchased approximately 3.45 million bales by 15 October, while 531,530 bales remained unsold. The pace of subsequent mill procurement will be critical in determining whether available supplies can be absorbed without additional price pressure.
Pakistan’s textile sector faces challenging times ahead
Pakistan’s textile sector is facing a combination of high energy costs, elevated taxation, expensive financing and growing competition from imported yarn and fabrics. These pressures have reduced the competitiveness of domestic manufacturers and contributed to factory shutdowns, weakening demand for locally produced cotton. The impact is particularly significant for the spinning and weaving segments, where higher raw material and operating costs can squeeze margins when yarn and fabric prices fail to keep pace.
Official data from Pakistan’s Ministry of Finance and Pakistan Bureau of Statistics (PBS) underline the sector’s weak export performance. Textile and apparel exports declined 0.5% y-o-y to $13.58 billion during July-March of fiscal year 2025-26, compared with $13.66 billion in the corresponding period a year earlier.
Full-year PBS figures subsequently showed textile exports rising just 0.26% to $17.93 billion in fiscal year 2025-26, indicating largely stagnant growth. However, performance varied by product: readymade garment exports increased 3.87% to $4.29 billion, while cotton cloth exports fell 7.55% to $1.67 billion and knitwear exports declined 0.88% to $4.97 billion.
Additionally, although overall export value increased 5.26% y-o-y to $5.03 billion in Q1FY’27 (July-September 2026), cotton cloth exports declined 5.34%, and knitwear volumes also continued to fall, indicating an uneven recovery. However, cotton yarn exports increased 24.47%. In February 2026, Pakistan’s Ministry of Commerce also acknowledged industry concerns over high energy tariffs, upfront taxes, delayed refunds, liquidity constraints and limited access to export financing.
As such, mill closures and subdued consumption could weigh on domestic cotton demand in Pakistan. However, weather-related crop losses could tighten supplies later in the season, potentially offsetting some of the pressure from weaker industrial demand.
Implications for Indian ginners and spinners
India’s direct exposure to Pakistan’s cotton market remains restricted. A Directorate General of Foreign Trade notification issued on 2 May 2025 prohibited direct and indirect imports of goods originating in or exported from Pakistan. Indian traders should therefore assess Pakistan’s market primarily through its potential influence on international prices, textile export competition and trade flows.
Nonetheless, Pakistan’s cotton market presents a mixed signal for India. Higher arrivals may ease local supply concerns, while weak textile consumption could intensify competitive pressure across regional export markets. Conversely, adverse weather and lower-than-expected final production could tighten availability.
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