Domestic cotton prices drop Rs200-400/maund

KARACHI: Pakistan’s cotton market experienced subdued prices this week amid serious concerns over a steep fall in domestic cotton production even as cotton imports surpassed local output for the first time in the country’s history. This shift marks a critical moment for Pakistan’s economy and its struggling textile industry, analysts said.

In Sindh and Punjab, cotton prices declined by Rs200 to Rs400 per 40kg. In Punjab, prices ranged from Rs16,400 to Rs16,700 per maund, while in Sindh, they stood at Rs16,100 to Rs16,300. Phutti (raw cotton) prices in Sindh were between Rs6,700 and Rs6,900, and in Punjab, they ranged from Rs6,800 to Rs7,400. Balochistan prices mirrored those in Sindh.

Despite intermittent rainfall hampering phutti arrivals and restricting factory operations in various regions, large mill groups showed renewed interest in local cotton. However, due to forecasted rains, many ginning units remained hesitant to procure phutti in bulk.

Naseem Usman, chairperson of the Karachi Cotton Brokers Forum, reported stability in international prices, with New York cotton trading at 66 to 69 cents per pound. The Karachi Cotton Association’s Spot Rate Committee maintained the spot price at Rs16,300 per maund.

As of July 15, only 297,751 bales had reached ginning factories -- down 32 per cent from last year, according to Pakistan Cotton Ginners Association data. While Punjab saw a 27 per cent rise in arrivals, Sindh’s output plunged 53 per cent, and Balochistan’s dropped 54 per cent.

For the first time, cotton imports have surpassed domestic production. Contracts for 7.5 million bales have been signed for FY26, costing up to $2.25 billion, according to Cotton Ginners Forum Chairperson Ehsanul Haq. In FY25, imports stood at 6.5 million bales, excluding additional imports of yarn, fabric, and edible oil.

The USDA reported 5,500 bales sold for 2024–25 and 73,000 for 2025–26, with Pakistan ranking third among importers with 12,400 bales.

Experts attribute the domestic crisis to climate impacts, substandard seeds, pest infestations, and water shortages in Sindh. The revival of a long-stalled agreement on cotton cess payments between the Pakistan Central Cotton Committee (PCCC) and APTMA is seen as a promising step towards restoring cotton research and productivity in the country.

To reverse the trend, Ehsan called on the government to ban sugarcane cultivation and sugar mill establishment in declared cotton zones to prioritise cotton farming and save billions in foreign exchange.

Meanwhile, APTMA has urged Finance Minister Muhammad Aurangzeb to honour budget promises by enforcing an 18 per cent sales tax on all imported cotton fibre, yarns, and grey fabric, and to retain these under the Export Facilitation Scheme (EFS). APTMA also demanded the removal of over 86 per cent sales tax on the ginning industry to restore over 1,000 dormant ginning and oil mills and help stabilise farmer incomes and the national economy.