Afghanistan Cotton & Derivatives Market- Trend Analysis & Forecasts

Afghanistan Cotton & Derivatives Market Overview:
Afghanistan’s raw cotton sector, valued at nearly US$ ** million in 2024, has shown gradual recovery as national cotton output stabilized around 48,000–55,000 tons between 2022 and 2024. Farm-gate lint prices improved to AFN 62–67 per kg, lifting farmer profitability and supporting cultivation across major provinces such as Kunduz and Balkh, which together contribute almost 45–50% of national supply. Despite average yields of 1.2–1.4 tons per hectare, far below global levels of 2.2–2.5 tons, Afghanistan remains a key regional supplier with lint exports reaching 22,000–26,000 tons annually, mostly destined for Pakistan’s textile mills that process more than 11 million bales each year. Domestic ginning capacity remains underutilized, with fewer than 30 ginneries operating at just 45–55% efficiency, yet cottonseed oil and cottonseed meal demand is rising as Afghanistan consumes 85,000–90,000 tons of vegetable oil per year, increasing the strategic importance of the sector.

Primary Areas/ Elements of Research & Analysis
The report provides comprehensive and valuable insights into the supply and demand dynamics of the Afghanistan cotton & derivatives market. Below are the variables considered and analyzed in the report:
• Supply-demand trends, market growth, and trade
• Market structure, conduct, and performance analysis
• Historical and forecasted market size (volume & value)
• Trade analysis (export & import), including key partners, quantities, values, and price trends
• Supply chain mapping, pricing, and regulatory framework
• Competitive landscape profiling of key players
• Factors influencing market performance, including sustainability trends

Market Growth Factors
Growth is strongly driven by rising regional textile demand, especially in Pakistan where production deficits of 3–4 million bales annually ensure consistent purchase of Afghan lint priced at US$ 1,450–1,520 per ton. Farm-level profitability has improved by nearly 15–18% since 2022, boosting planting areas by 6–8% yearly as profit margins expand to 20–24%. Consumption of cottonseed oil in Afghanistan, currently 85,000–90,000 tons, is increasing at 4–6% CAGR due to growing household demand, while cottonseed meal—valued at US$ 280–310 per ton—supports a regional livestock market worth over US$ 2.5 billion. Competitive production costs of US$ 450–520 per hectare, compared with US$ 1,100–1,200 in countries such as the U.S. and China, further strengthen Afghanistan’s regional advantage, encouraging trade flows to Pakistan, Uzbekistan, and India.

Market Restraints & Challenges
Growth is hindered by persistently low yields of 1.2–1.4 tons per hectare, significantly underperforming regional peers like Uzbekistan at 2.5–2.7 tons, largely due to limited certified seeds and rising input costs of 8–12% annually. Ginning inefficiencies remain a major bottleneck, with wastage rates of 6–8% compared with global norms of 3–4%, reducing export competitiveness by US$ 10–15 per ton during peak seasons. Transport constraints have raised inland logistics costs to US$ 38–45 per ton, slowing export delivery times to 6–12 days versus the 3–5 days usually seen in more efficient trade corridors. Afghanistan’s weak textile capacity, with fewer than 10 functioning mills, restricts domestic value addition and contributes to an annual loss of US$ 100–120 million in unrealized downstream potential.

Market Segmentation
Lint remains the dominant product, contributing **% of total cotton revenue and generating US$ 80–110 million through exports of ** thousand tonnes annually. Cottonseed production of ** thousand tonnes supports a growing oil extraction industry where cottonseed oil, priced at US$ 720–780 per ton, competes effectively against higher-priced sunflower oil at US$ 900–1,000 per ton. Cottonseed meal output of ** thousand tonnes continues to serve regional feed producers, particularly in Pakistan where demand grows 4–5% annually. Afghanistan exports more than 80–85% of its cotton as raw or minimally processed products, while domestic mills consume only ** thousand tonnes of lint due to underdeveloped textile capacity. Regional segmentation remains concentrated, with northern provinces contributing nearly 70% of the country’s cotton output.

Competitive Landscape
The sector is dominated by 25–30 ginneries that collectively process ** thousand tonnes of lint annually but operate at low efficiency, though a few modern units have achieved conversion ratios of 36–38%, improving their realized prices by US$ 15–20 per ton. Cross-border traders maintain strong procurement networks with Pakistani groups that import nearly 1 million tons of cotton every year and purchase the majority of Afghanistan’s lint. Cottonseed processors face rising demand as domestic oil consumption approaches 90,000 tons, pushing cottonseed prices to AFN 17–20 per kg. Regional traders from Uzbekistan and Iran have increased annual procurement of 5,000–8,000 tons of cottonseed and meal, while domestic weaving units process only 12,000–14,000 tons of lint due to low mechanization and outdated machinery.

Outlook
The Afghanistan cotton and derivatives market, valued at US$ ** million in 2023, is projected to expand to US$ ** million by 2032, reflecting a CAGR of **% supported by rising regional demand and gradual yield improvements. National production is expected to reach ** thousand tonnes by 2032 as planting area expands 10–12% and certified seed adoption improves productivity. Lint exports are projected to increase to ** thousand tonnes, while cottonseed oil consumption could rise to ** thousand tonnes as Afghanistan’s edible oil deficit widens. Investment in modernizing the country’s 25–30 ginneries could reduce wastage to below 4%, enhancing competitiveness despite continued logistical and geopolitical challenges.

Scope of the Report:
• Historical Years: 2018-2023
• Base Year: 2024
• Forecast Period: 2025-2032
• Units: Value (US$ Million) and Volume (Thousand Tonnes)
• Segments Covered:
By Product Type (Cotton Lint, Cotton Yarn, Cotton Seed, Cottonseed Oil, and Cottonseed Meal)
By End-use Industry (Textile, Edible Oil Processors, and Feed Manufacturers)
By Sales (Domestic Sales and Exports)
• Companies Profiled: The market players include, Kunduz Cotton Oil & Ginning Ltd., Balkh Spinning & Ginning Industries, Baghlan Cotton Processing Co., Faryab Lint & Seed Industries, Helmand Agricultural Cotton Corp., Takhar Ginning & Pressing Co., Herat Cottonseed Oil Refinery, Afghan Cotton & Edible Oils Ltd., Northern Provinces Cotton Traders Union, Kandahar Agricultural Inputs & Cotton Supply Co., Kabul Textile & Spinning Pvt. Ltd., Mazar-e-Sharif Cotton Trading Syndicate, Pak–Afghan Textile Procurement Group, Central Asia Cottonseed Meal Exporters Consortium, Silk Route Cotton & Oilseed Merchants, and Others.

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