Karachi: The textile industry in Pakistan is grappling with a confluence of challenges as it faces increased pressure from both domestic and international fronts. The government has set an ambitious raw cotton output target of over 10 million bales for the fiscal year 2026, a significant increase from the 7 million and 10.2 million bales recorded in fiscal years 2025 and 2024, respectively. Achieving this target is crucial for the government to meet its agriculture sector growth goal of 4.5% and an overall GDP growth target of 4.2% for the same period.

According to the latest cotton sowing data, 90% of the targeted sowing has been achieved in Punjab. In contrast, Sindh has only reached 65% of its cultivation area target, with the sowing season nearing its end. A sensitivity analysis indicates that a 10% shortfall in expected sowing could reduce output to 9 million bales, assuming no changes in yield.

Despite a relatively uneventful fiscal year 2026 budget for the textile sector, the industry continues to struggle with the aftermath of previous budgetary measures and energy sector reforms, including the imposition of a gas levy for captive power plants.

Additionally, the global trade outlook remains weak, compounded by geopolitical tensions, which further strain the entire cotton supply chain. This environment is likely to weaken demand and the price outlook for cotton and textile products, posing significant challenges for the industry moving forward.

These developments underscore the hurdles the textile sector must overcome to meet government targets, while also navigating a complex global trade environment.