The government has fixed a price of Rs. 5,700 per 40 kg cotton price for the coming harvesting season of cotton. In this regard, a summary of the Ministry of Food Security was approved in a meeting of the Economic Coordination Committee (ECC) of the Cabinet, headed by Finance Minister, Shaukat Tarin, held earlier today.
It was also informed that the Intervention Pricing Policy for the cotton crop would expire on 31 December 2022.
Sources said that the supportive price of Cotton was fixed at Rs. 5,700 per 40 kg for the year 2022-23. The government is anticipating that the production of cotton will be increased by 10 percent due to this supportive price. This will help increase the income of the farmers who do not get a reasonable price in this regard. It was also proposed to form a cotton price review committee that would monitor the prices.
For future projections, the government has proposed a set production target of 2 million bales next year.
Cotton is the lifeline of Pakistan’s economy, and while, the production of 14.1 million bales was achieved in 2004-05, over the last four years, its production had declined to 9.18 million bales in 2019-20 and 8.98 million bales in 2020-21 mainly due to area decline in Punjab and a thin profit margin as opposed to other crops like sugarcane, maize, and rice.
Pakistan can potentially produce 20 million bales in three to five years if farmers are supported with appropriate technology and are ensured a fair price.
In the past, Pakistan has procured cotton through the Trading Corporation of Pakistan (TCP) five times between 1998-2010. A comparison of the intervention period with that of the non-intervention period revealed that the cotton area end yield had increased during the TCP intervention period and had decreased during it without intervention (2011-2020).
The Ministry of NFS&R had moved similar summaries (the intervention price of cotton) twice in 2020, but the ECC disagreed with it. Resultantly, the Cabinet had constituted a committee comprised of the Ministers of Foreign Affairs, NFS&R, Economic Affairs Division (EAD), and the Advisor to the Prime Minister on Climate Change to deliberate on the issue.