Pakistan, July 5 -- There is a revealing cruelty in the latest cotton crisis. Pakistan's most important export industry is being weakened at home itself by a tax structure that has made local cotton less attractive to buy and more expensive to move through the formal value chain. The closure of ginning factories in Tando Adam and other cotton centres within weeks of the season's opening should therefore not be dismissed as another sectoral complaint.

The immediate trigger is the federal government's decision to retain the 18pc sales tax burden on cotton ginning and its by-products. Cotton prices have crashed, phutti and oil cake rates have fallen sharply, ginners are reporting liquidity losses, and farmers entering harvest season are sud...