KARACHI: The local cotton market witnessed a continuous fluctuation in prices over the past week. However, the trading volume remained relatively good.
The All Pakistan Textile Mills Association (Aptma) has appealed to the government to restore the Export Finance Scheme (EFS) facility on local cotton.
Federal Minister Rana Tanveer Hussain announced the reconstruction of the Pakistan Central Cotton Committee (PCCC). He stated that the committee will utilise all possible resources to revive cotton and facilitate cotton growers. He also announced to hold a National Cotton Conference (NCC) on February 4th in Multan.
The Pakistan Textile Council (PTC) has appealed to the government to reconsider its decision to shut down cotton processing plants (CPPs).
Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood said that there is no shortcut to cotton revival and the formulation of a viable and realistic cotton policy is imperative.
Agriculture Extension and the World Wildlife Fund Pakistan (WWF-Pakistan) has organised a workshop in Karachi to discuss partnerships for sustainable organic cotton and the economy.
The local cotton market witnessed a mixed trend last week. Textile mills are purchasing the cotton, cautiously. Due to the generally lower quality of local cotton, mills are showing more interest in imported cotton. Any decline in New York cotton prices prompts mills to immediately enter into import contracts, while they tend to wait if prices increase.
Nonetheless, approximately 36 lac bales of import contracts have already been finalised, with additional contracts being made periodically. Sources suggest that Pakistan may need to import around 50 lac bales of cotton this year, incurring a cost of approximately $2 billion.
Meanwhile, spinners are facing an exemption on sales tax (EFS) for imported cotton and cotton yarn, while local cotton is subject to an 18% sales tax. The Aptma has requested the government to extend the EFS facility to local cotton, as well. The Pakistan Textile Council (PTC) has urged the government to reverse the decision of the Committee on Power Plants (CPPs) to shut down gas supply.
Due to the low local cotton production, the season is expected to be over soon.
State Bank of Pakistan (SBP) is expected to reduce the interest rate by 2-2.5% on December 16th. This reduction is anticipated to benefit businesses, industries, and especially the textile sector.
The rate of cotton in Sindh is in between Rs 16,000 to Rs 17,500 per maund. The rate of Phutti is in between Rs 7,000 to Rs 8,200 per 40 kg depending on quality.
The rate of cotton in Punjab is in between Rs 16,500 to Rs 18,000 per maund. The rate of Phutti is in between Rs 7,000 to Rs 8,800 per 40 kg.
The rate of cotton in Balochistan is in between Rs 16,700 to Rs 17,800 per maund. The rate of Phutti prices is in between Rs 7,400 to Rs 9,200 per 40 kg.
The rate of Balochi cotton is in between Rs 18,000 to Rs 18,200 per maund. The rate of Primark variety is in between Rs 18,700 to Rs 18,800 rupees per maund.
The prices of Banola, Khal and oil remained stable.
The Spot Rate Committee of the Karachi Cotton Association kept the rate of cotton unchanged at Rs 17,300 per maund.
Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, has stated that the international cotton price has remained relatively stable. The New York cotton futures price is currently fluctuating between 69 and 71 US cents per pound.
According to the USDA’s weekly export and sales report, for the year 2024-25, one lac and fifty thousand 153,000 bales were sold. Vietnam topped the list by purchasing seventy five thousand and eight hundred bales. Pakistan came in second with the purchase of fifty thousand and seven hundred bales, followed by Malaysia with ten thousand bales.
For the year 2025-26, thirty three hundred bales were sold, all of which were purchased by Japan.
Meanwhile, Federal Minister for the Ministry of National Food Security and Research, Rana Tanveer Hussain, has said that the federal government will take all possible steps to restructure the Pakistan Central Cotton Committee (PCCC), revive cotton, and provide facilities to farmers.
He expressed these views while addressing the participants of the 90th meeting of the PCCC Governing Body held at the Ministry of National Food Security. He highlighted the need and importance of the cotton industry for Pakistan’s economy and reiterated the government’s commitment to fully support this sector.
The Minister said that cotton is an important crop for our country’s economy and we need to take steps to improve its production, quality, and exports.
A detailed discussion on the cotton cess issue and the restructuring of the Pakistan Central Cotton Committee (PCCC) took place in between the PCCC and the textile industry.
The meeting was attended by a number of high-ranking officials, including the Additional Secretary of the Ministry of National Food Security and Research, the Cotton Commissioner, and other senior officers. Representatives from the provinces, farmers, and various textile associations were also present.
In the meeting, a proposal was put forward by the Federal Minister, Rana Tanveer Hussain, to form a committee consisting of representatives from the PCCC, APTMA, and the Ministry of National Food Security and Research to resolve the long-standing issue of cotton cess arrears. This committee is expected to meet within the next two weeks to come up with a mutually agreed-upon solution to present at the next meeting.
In the meeting, the Vice President of the Pakistan Central Cotton Committee, Dr. Yusuf Zafar, requested Aptma Chairman Kamran Arshad to ensure the regular payment of cotton cess by the textile industry from the coming month of January. The Aptma Chairman assured the forum of the regular payment of cotton cess from January, which was appreciated by the participants of the meeting.
Furthermore, the Aptma has requested the federal government to immediately restore the Export Finance Scheme (EFS) in the form of its Pre-finance Act 2024, which allowed a sales tax exemption and zero rating on all domestic supplies used under it.
The Aptma Southern Region has stated that spinning mills are facing severe losses and closures due to the misuse of the EFS.
Pakistan Textile Council (PTC) has urged the government to reverse its decision to cut off gas from captive power plants (CPPs), emphasising the critical need to ensure an uninterrupted gas supply to CPPs to sustain industrial growth, boost exports, and ensure long-term economic stability.
The government’s decision to halt the supply of natural gas to industries operating captive power plants from February 1, 2025, as part of its commitments to the International Monetary Fund (IMF), has sparked widespread concern in the textile industry, with warnings of severe repercussions for industries.
Meanwhile, Sajid Mahmood, the Head of the Technology Transfer Department at the Central Cotton Research Institute Multan, has stated that there is no shortcut to cotton revival. It is a process that requires a long-term, coordinated, and sustainable strategy. As an immediate measure, the announcement of a support price for cotton and limiting the cultivation of sugarcane and rice in the cotton-growing areas of southern Punjab can improve cotton promotion. We need a comprehensive roadmap that takes into account ground realities, climate change, and modern scientific principles, and provides a practical solution to cotton production and farmers’ problems. By fully activating and empowering the governing body of the PCCCI, cotton can be promoted through a sustainable cotton project.
Sajid Mahmud stated that the formulation of a practical and realistic cotton policy is urgently needed at this time. This policy would be instrumental in resolving the issues faced by cotton farmers, reducing production costs, and providing viable projects for all stakeholders involved in the industry. Mere claims, announcements, or slogans will not solve the problem. Without practical actions, sustainable policies, and the timely provision of resources, the revival of cotton is not possible. The government, private sector, and research institutions must jointly develop a clear and robust roadmap that addresses all challenges. It is time for us to take the cotton crisis seriously and, through a coordinated and actionable strategy, put this industry back on the path to growth. The revival of cotton is not only a guarantee for farmers but also for the economic revival of the country. There is a need to strengthen organic produce.
A workshop hosted by the Agriculture Extension Department, government of Balochistan, under the leadership of the Secretary of Agriculture, Government of Balochistan. This workshop is sponsored by the EU-funded Balochistan Rural Water Resources Program (RBWR-TA).
The objective is to bridge the gap and connect organic produce with key stakeholders in Balochistan for export markets. The workshop will focus on commodities like wheat, rice, sesame, apples, pulses, onions, tomatoes, dates, cherries, and chili peppers, and will explore strategies to strengthen market connections, access, and integration of these products into national and international markets.
Supply chains are now aligned with the recently approved Balochistan Organic Agriculture Policy.
A fruitful partnership between the Balochistan Department of Agriculture, WWF-Pakistan, Laudes Foundation, and renowned textile groups is successfully promoting organic cotton cultivation.
Approximately 100,000 acres are earmarked in the province, setting a benchmark for environmentally friendly practices in the textile industry. Furthermore, the recent approval/ adoption of the Balochistan Organic Agriculture Policy developed in collaboration with CABI underscores our shared commitment to promoting sustainable agricultural development.
The primary objective of this event is to bring all stakeholders onto a platform to foster partnerships for sustainable and credible organic cotton production in Pakistan. The event will also provide practical recommendations to address key challenges such as the availability of quality bio-inputs and strengthening the supply chain of organic cotton production systems at the local and national level.
Copyright Business Recorder, 2024
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