The cotton mafia is ruining the textile sector in Pakistan.

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Dr. Murtaza Mughal, President of Pakistan Economy Watch (PEW), said on Thursday that Pakistan’s most important industrial and export sector, textiles, should be saved from the clutches of the influential cotton mafia. He said that during the last cotton harvest, the powerful mafia bought large quantities of raw cotton from ginners, after which it reduced its market supply. Following the shortage, the prices started rising, and the textile mill owners only learned about it when they had missed the boat, he added.

In a statement today, Dr Murtaza Mughal said that the millers had to buy raw cotton at a much higher price than the actual price, which increased their business costs. He added that the surge in business costs also affected their production and exports, leading to the closure of many factories. The textile mill owners had to pay more than usual, which benefited the mafia, but the farmer got nothing, he observed.

Dr. Murtaza Mughal said that cotton production in Pakistan is continuously declining, and the area under cotton cultivation in Sindh and Punjab is decreasing. However, since the country’s sugar production already exceeds its needs and the government must provide significant subsidies to export excess sugar, the uncontrolled cultivation of sugarcane must stop.

He said the Punjab government’s decision not to buy wheat this time is correct. The Punjab government has 22 lakh, 70 thousand tonnes of grain, so why should it buy more?

The Punjab government also has to return the loan of 355 billion rupees taken last year to buy wheat. Moreover, 125 billion rupees in interest is also given yearly on grain purchases, while it takes more than one billion rupees to store and handle it.

He said that buying wheat would not benefit the farmers but the hoarders, so the provincial government should not change its decision under pressure.

Dr. Mughal said that agriculture is one of the country’s most important sources of income, with almost 23% of the GDP coming from it. The country had terrible floods in 2022, which hurt wheat production and led to a wheat shortage in early 2023.

Pakistan needs about 30 million tonnes of wheat annually, but only 26.2 million tonnes were produced in 2022. This caused prices to rise and long lines of people to try to buy wheat in cities, prompting imports.

From September 2023 to March 2024, more than 3.5 million metric tonnes of wheat were imported into Pakistan, leaving little room for new purchases from local farmers. This has dented the expected profit margin, resulting in protests.

 

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