As global recession looms, Pakistan’s cotton demand tithers

A perfect storm is brewing for the global cotton industry. Growing economic headwinds, including a looming recession in developed markets and aggressive central bank tightening, are affecting global spending. This, coupled with geopolitical tensions, has sent cotton prices down by half in the past two years.

With consumption lagging and stockpiles at a decade high, cotton producers face an uncertain outlook. Pakistan's textile exporters, already burdened by high energy costs and a new minimum tax, are particularly vulnerable. While Bangladesh's political instability offers potential opportunities, the region's overall export prospects remain bleak.

To salvage the situation, Pakistan's central bank must urgently cut interest rates to support exporters, while balancing inflation concerns. A clear roadmap for reducing borrowing costs is essential to restore business confidence and prevent further economic damage.