Pakistan is the fifth largest producer of cotton in the world, the third largest exporter of raw cotton, the fourth largest consumer of cotton, and the largest exporter of cotton yarn. 1.3 million farmers (out of a total of 5 million) cultivate cotton over 3 million hectares, covering 15 per cent of the cultivable area in the country. Cotton and cotton products contribute about 10 per cent to GDP and 55 per cent to the foreign exchange earnings of the country. Taken as a whole, between 30 and 40 per cent of the cotton ends up as domestic consumption of final products. The remaining is exported as raw cotton, yarn, cloth, and garments.
Cotton production supports Pakistan’s largest industrial sector, comprising some 400 textile mills, 7 million spindles, 27,000 looms in the mill sector (including 15,000 shuttleless looms), over 250,000 looms in the non-mill sector, 700 knitwear units, 4,000 garment units (with 200,000 sewing machines), 650 dyeing and finishing units (with finishing capacity of 1,150 million square meters per year), nearly 1,000 ginneries, 300 oil expellers, and 15,000 to 20,000 indigenous, small scale oil expellers (kohlus). It is by any measure Pakistan’s most important economic sector. Not surprisingly, government policy has generally been used to maintain a stable and often relatively low domestic price of cotton, especially since 1986-87 through the imposition of export duties, in order to support domestic industry.
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