Bad News for Pakistan’s Cotton: World Bank Sounds the Alarm

The World Bank has issued a stark warning for Pakistan's cotton industry, projecting a 6 percent decline in the country's cotton production for the 2026-27 season. This decline is expected to be mirrored by reductions in global cotton production, with China and Pakistan each facing a 6 percent drop, and the United States and Brazil seeing a 3 percent decrease.

Meanwhile, global cotton consumption is anticipated to rise by 2 percent, leading to a reduction in the stocks-to-use ratio to a worrisome 0.57 from the current 0.63 level.

The tighter outlook has already caused cotton prices to surge, with a 6 percent increase quarter-on-quarter in the third quarter of 2026. Prices remain around 20 percent higher than a year earlier, and the World Bank expects cotton prices to climb by 14 percent in 2026, followed by more modest increases in 2027 and 2028 as production rebounds.

Beyond cotton, the World Bank anticipates a 23 percent rise in global commodity prices in 2026, the second-highest level since 2013. Energy prices, primarily driven by a 32 percent jump in oil, are the main contributors to this increase. Food commodity prices are also expected to surge by 10 percent in 2026 and another 7 percent in 2027, while metal and mineral prices are projected to reach record highs due to supply constraints and increased demand from renewable energy infrastructure and electric vehicles.