Pakistan has reimposed customs duty on cotton imports.
The aim is to maintain stability in cotton prices in the country, give farmers a confidence for better management and investment in the existing crop, thus helping in improving yields. The duty was brought back under the fear that if cotton imports were to continue, an imbalance in cotton stocks in the country would result and in turn exert a downward pressure on cotton prices in the beginning of the current season, thus jeopardizing the interest of farmers.

Pakistan produces around 13 million bales of cotton while it imports about a million bales to meet the gap between consumption and production. Additionally, one to 1.5 million bales Extra Long Staple (ELS) cotton per annum is also imported as this quality is not produced in the country. Cotton production in 2017-18 witnessed a 12 per cent increase over the past year.

But the area under cotton in Pakistan has witnessed a decline over the last few years. Price advantage and support price of other commodities are among the main reasons for this decline.

So customs duties and sales tax were reimposed on the import of cotton prior to the arrival of cotton in the market.