Pakistan ‘looking to damage’ Kandahar cotton industry: investors

A cotton processing factory in Kandahar.

A group of investors from the southeastern province of Kandahar said that Pakistan is “seeking to damage” the cotton industry in Afghanistan and has, for the past two years, withheld payment of at least $30 million.

There are at least 20 cotton processing factories in the Kandahar Industrial Park, which is the main hub for processing cotton produced in Kandahar and Helmand.

Pakistan’s cotton import volume from Afghanistan meanwhile amounted to $161.21 million in 2021, according to the United Nations COMTRADE database on international trade.

In 2019, the total import volume was over $23 million. There is no data on cotton exports from Afghanistan in 2020.

Cotton exports to Pakistan officially started in 2018 after the two sides agreed to ease restrictions on cotton trade.

Figures by the ministry of agriculture under the previous government show that Afghanistan produced at least 74,000 tons of cotton in 2021.

According to the ministry’s statistics, large-scale cotton farming was prolific in Samangan, Sar-e-Pul, Badghis, Kunar, Faryab, Nangarhar, Herat, Laghman, Helmand, Kandahar and Kapisa provinces at the time and an estimated 56,700 acres of land was used to grow cotton in 2021.

Now, in its harvest season, investors said Kandahar farmers produce at least 150 tons of cotton a month, most of which is processed in Kandahar and then sent to Pakistan.

According to them, the factories process the cotton seed for cotton fibers and for by-products that include oil and feed for animals.

“Pakistan wants to close cotton factories in Kandahar and wants to take the industry to Pakistan,” said Ahmadullah, a cotton factory owner in Kandahar. “This is Pakistan’s goal because they don’t want our processed cotton and delay our payments.”

The business community said that Afghan investors are not able to discuss the issue directly with relevant government institutions in Pakistan in order to solve the issue.

Taliban officials said, however, that cotton factory owners have not shared the problem of non-payment by Pakistan with them.

“They should share the issue with us and we will share it with the (commerce) ministry and the issue will be solved,” said Ali Mohammad, a Taliban manager at the Kandahar Industrial Park.

At least 200 factories are based in the industrial park but many have closed down due to power cuts, a shortage of raw materials and a severe lack of markets for their products in the last year, investors said.