KARACHI: The cotton market experienced mixed price trends while business activities remained limited. The spot rate remained stable at 15,200 rupees per maund.
Cotton production has witnessed a dangerously continuous decline, according to experts. Relevant sources indicate that this year production is expected to barely reach 5.5 million bales, matching last year’s output.
Despite the persistent decline in cotton production, the federal government has granted permission to establish additional sugar mills, which raises concerns about further negative impacts on cotton crops. Commenting on the situation, Ehsan ul Haq stated that the government’s unfriendly policies have resulted in more than 300 ginning factories and over 150 textile units becoming inactive, including mills belonging to major textile groups.
On another front, the government has decided to increase textile and apparel exports by 64 percent over the next five years.
The local cotton market experienced a mixed trend in cotton prices during the past week. Textile mills are engaged in limited cotton purchasing, while several ginners are stocking cotton in anticipation of an increase in quality cotton prices in the coming days, which has resulted in relatively lower business volumes and prevented any significant price fluctuations. The Spot Rate Committee of the Karachi Cotton Association has maintained the spot rate steady at 15,200 rupees per maund.
According to market sources, due to the low cotton production report from the Pakistan Central Cotton Ginners Association as of November 15, it appears that the total official cotton production may fall slightly below 55 lakh bales. Because of this reduced cotton production, some ginners are showing interest in stockpiling quality cotton.
On the other hand, it is regrettable that while the government, the Minister of Agriculture, and several organisations associated with the cotton business are talking about cotton revival, the government appears to be taking practical measures that reduce cotton production rather than increase it. The reason for this is that permission has been granted to establish additional sugar mills in cotton-producing areas. According to sources, this will lead to increased sugarcane cultivation at the expense of cotton crops. Cotton farmers are already turning toward other crops due to inadequate pricing for raw cotton. Despite the impact on textile exports, the federal government has decided to lift the ban on establishing new sugar mills across the country. This measure raises concerns that increased sugarcane cultivation will lead to higher imports of premium cotton and edible oil worth billions of dollars.
Due to unfriendly government policies, more than 300 ginning factories and over 150 textile mills have already become non-operational, including mills belonging to major textile groups. These factors clearly indicate the dangers of further decline in cotton consumption.
According to an analysis, Pakistan’s three main cotton stakeholders including farmers, cotton ginners, and spinners are currently passing through their most difficult period.
Cotton farmers are not receiving quality seeds, quality agricultural medicines, and proper guidelines. The cotton farmer is purchasing the region’s most expensive fertilizer and other agricultural inputs while separately battling against seasonal conditions. Lower crop yields and reduced prices for this crop have left cotton farmers disappointed.
The second stakeholder consists of cotton ginners who are trapped in unjust taxation. Those cotton ginners who have closed their factories this year have managed to save some money, but the Federal Board of Revenue has its full attention on their earnings, and the reality is that the ginners simply cannot pay the tax demands that the FBR is making.
The third and important stakeholder comprises the spinning mills, and during the past three decades, the spinning sector is currently witnessing the most problems and difficulties. The spinning sector has reached the brink of disaster due to several-fold increases in production costs, electricity expenses, interest rate hikes, and the pressure from imported yarn.
Cotton prices in Sindh and Punjab provinces are running at 14,700 to 16,000 rupees per maund depending on quality, while Phutti prices are running at 6,000 to 8,200 rupees per 40 kilograms.
In Balochistan province, cotton prices are running at 15,300 to 16,000 rupees per maund, while Phutti are running at 7,800 to 9,200 rupees per 40 kilograms.
The prices of Phutti, cottonseed cake, and cottonseed oil remain stable.
The Spot Rate Committee of the Karachi Cotton Association has kept the spot rate stable at 15,200 rupees per maund.
Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, reported that international cotton prices showed a mixed trend. New York cotton futures prices remained between 62.50 and 66.50 American cents.
Meanwhile, despite the closure of hundreds of textile mills and ginning factories due to unfriendly government policies toward the entire cotton sector and the continuous decline in textile exports, the federal government’s decision to lift the ban on establishing new sugar mills across the country has raised concerns about record depletion in foreign exchange reserves. This is expected to occur through billions of dollars worth of standard quality cotton imports as well as billions of dollars worth of edible oil imports, exacerbated by further increases in sugarcane cultivation.
Ehsan-ul-Haq, Chairman of the Cotton Ginners Forum, explained that according to reports, the federal government has decided to deregulate the sugar industry. Consequently, the Ministry of Food Security will send a summary to Prime Minister Mian Shehbaz Sharif within the next day or two, which includes the decision to lift the ban on establishing new sugar mills. This decision has raised concerns about a record increase in sugarcane cultivation and further decline in cotton cultivation due to the establishment of new sugar mills.
He explained that due to unfriendly government policies, which particularly include an extraordinary sales tax rate, the world’s highest power tariff, and non-payment of billions of rupees in income and sales tax refunds for several years, more than three hundred ginning factories and over one hundred fifty textile mills have already become non-operational, including mills belonging to major textile groups.
He stated that despite the total domestic cotton production falling to the lowest level in the country’s history, revelations have emerged about a further decrease in cotton consumption in Pakistan rather than its production. This is due to the closure of several ginning factories and textile mills in Pakistan and the deterioration of cotton quality caused by sugarcane contamination, raising concerns about severe impacts on the country’s agricultural economy.
He mentioned that according to the Pakistan Cotton Ginners Association report, by November fifteenth, a total of 4,857,000 bales of seed cotton had arrived at ginning factories across the country, which is only one percent less compared to the same period last year.
According to the report, during the mentioned period, 2,168,000 bales arrived at Punjab’s ginning factories and 2,689,000 bales in Sindh, which represents a three percent decrease in Punjab and a two percent increase in Sindh compared to last year. The report indicates that during this period, textile mills purchased 3,992,000 bales from ginning factories while exporters purchased 167,000 bales.
He explained that by October thirty-first, 2025, textile mills had purchased 3,590,000 bales from ginning factories, which was 55,000 bales more compared to the same period last year. However, by November fifteenth, these purchases were 148,000 bales less compared to the same period last year, which indicates the severe economic crisis ongoing in the textile industry.
He stated that according to the Pakistan Cotton Ginners Association report, by November fifteenth, cotton production in Punjab stood at 2,168,000 bales, while according to the Crop Reporting Services of the Government of Punjab, by November seventeenth, cotton production in Punjab was 3,810,000 bales, which is incomprehensible.
He mentioned that certain American organizations had demanded from the Government of Pakistan to exempt American cotton imported through Karachi Port from fumigation to increase their cotton exports to Pakistan, so that this imported cotton could reach the relevant textile mills without any delay. In response, the Government of Pakistan established a six-member committee headed by Federal Minister for Food Security Rana Tanveer Hussain, which included the Prime Minister’s Special Assistant for Industry and Production, Federal Minister for Environment, Federal Secretary National Food Security, Secretary Commerce, and Director General Plant Protection as members. The committee was asked to submit recommendations within seven days. However, despite several days passing, the committee’s report has not yet come to light.
He explained that if American cotton is granted exemption from fumigation in Pakistan, imports from other countries, especially Brazil, where cotton is considerably cheaper than American cotton this year and Pakistani textile mill owners are importing most cotton from Brazil this year, could decrease significantly while American cotton imports could increase substantially. This could further exacerbate the economic problems of the Pakistani industry.
Furthermore, the federal government has devised a plan to increase textile and apparel exports by sixty-four percent over five years. The Ministry of Commerce has prepared a draft of the new five-year Textile and Apparel Policy from two thousand twenty-five to two thousand thirty. Under the draft, the new textile policy will promote “Made in Pakistan” products.
Copyright media, 2025
American Dollar Exchange Rate