KARACHI: Cotton prices improve during the previous amid challenges persisting. Recent market trends have shown a slight improvement in cotton prices. However, the overall business volume continues to decline. The New York cotton market; however, has exhibited a mixed trend.
Locally, the facilitation of the Export Finance Scheme (EFS) has severely impacted the domestic spinning sector. As a result, there has been a significant increase in imports of cotton, cotton yarn, and fabric, causing losses to local ginners and farmers.
In response to this situation, the All Pakistan Textile Mills Association (APTMA) has requested the government to extend the EFS facility to local cotton, as well.
On the other hand, locsl textile sector has shown interest in the Heimtextil exhibition.
Head Transfer of Technology Central Cotton Research Institute Multan Sajid Mahmood said that Kamran Arshad, Chairman of APTMA, has pledged full support for the promotion and development of cotton.
The government has been urged to negotiate with the IMF to remove the ban on setting Minimum Support Prices (MSP) for cotton and other commodities to increase crop production.
The cotton market remained relatively stable over the past week. Business volume was low due to cautious buying by textile mills. However, the New York cotton futures prices exhibited a mixed trend.
On the other hand, ginners are stockpiling relatively high-quality cotton, anticipating a price increase in January, as December bank closings will affect payments. However, many ginners are making deals on the condition of January payment. The textile sector is not in a good condition. According to APTMA Chairman Kamran Arshad, approximately 40% of the textile sector is currently facing a crisis, largely due to the exorbitant cost of energy.
He stated that efforts are being made to revive the cotton crop. He emphasised the need to improve the quality of cotton seed. India, with a cotton production of 3.5 lac bales, has around 350 seed companies, while Pakistan, with a cotton production of 70 lac bales and has approximately 1,500 seed companies. Moreover, there are many unregistered seed companies operating in the market.
According to sources, significant discussions regarding cotton revival took place at FPCCI. Members associated with the cotton industry and representatives of farmers participated in these discussions where they reiterated their commitment to taking effective measures for cotton revival.
To enhance cotton and other crop production, countries like India have implemented a Minimum Support Price (MSP) mechanism. Government agencies purchase crops at the MSP if market prices fall below this level, thereby stabilising prices. In India, the Cotton Corporation of India (CCI) buys a substantial quantity of cotton if prices dip below the MSP, leading to increased cotton production.
Pakistan; however, is barred from implementing an MSP due to IMF conditions. Efforts should be made to persuade the IMF to allow the restoration of MSP. Additionally, the government should also purchase crops at the MSP if market prices fall, which would encourage increased crop production.
The price of cotton in Sindh province is in between 16,500 to 18,000 rupees per maund, while the price of Phutti varied between 6,500 and 8,400 rupees per 40 kilograms.
In Punjab province, cotton prices were slightly higher, ranging from 16,800 to 18,000 rupees per maund, and Phutti prices were in between 6,500 and 9,200 rupees per 40 kilograms.
Balochistan province saw cotton prices ranging from 16,800 to 18,200 rupees per maund, with Phutti prices were in between 7,400 and 9,300 rupees per 40 kilograms.
The price of Balochi cotton is in between 18,200 and 18,400 rupees per maund. PRIMARK cotton was priced between 18,600 and 18,800 rupees per maund. The prices of Banola, Khal, and oil remained stable.
The Spot Rate Committee of the Karachi Cotton increased the spot rate by Rs 2,00 per maund and closed it at Rs 17,500 per maund.
Naseem Usman, the chairman of the Karachi Cotton Brokers Forum, said that the international cotton market continues to exhibit a mixed trend. According to the USDA’s weekly export sales report, two lac and seventy nine thousand and one hundred bales were sold for the year 2024-2025. Turkey was on number one by purchasing one lac and eight thousand and seven hundred bales. Vietnam was in second place with the purchase of one lac and four thousand and five hundred bales. Pakistan secured the third position by buying forty one thousand and nine hundred bales.
For the year 2025-2026, twenty nine thousand and five hundred bales were sold. Pakistan topped the list of buyers by purchasing twenty two thousand bales, followed by Turkey with the purchase of seven thousand and five hundred bales.
Meanwhile, Chairman of the Special Committee for Cotton Industry Revival (FPCCI), Malik Sohail Talat, briefed the Chairman of the Standing Committee of the Cabinet Secretariat, Senator Rana Mahmood ul Hassan, in detail along with the President of the Pakistan Business Forum, Khawaja Mahboob Rahman. He stated that increasing cotton production in the country is imperative for economic revival.
An increase in cotton production can lead to significant export benefits for the textile industry and the economy. However, importing foreign cotton and then exporting products made from it due to the unavailability of local raw material is not in the best interest of the country.
The 18% sales tax imposed on local cottonseed, cotton linters, and cottonseed oil is a hindrance to increasing cotton production, while imported cotton and yarn are exempted from this tax. The heavy tax on local raw materials and zero tax on imported raw materials is discouraging local production, which is detrimental to the economy.
With over 2,200 Pakistani professionals set to attend the four-day Heimtextil 2025 event in Frankfurt, Germany, the country is poised to make a significant mark on the global textile industry. Supported by more than 1,200 staff, over 270 exhibitors, and a large number of Pakistani visitors, this event showcases Pakistan’s strong position as a key player in the global textile market. The sustained demand for Pakistani textile products further solidifies the country’s reputation in this domain.
Moreover, with over 270 exhibitors, this is Pakistan’s largest participation to date, demonstrating the country’s exceptional textile expertise to the world and strengthening its position in the global market.
With a notable 10% increase in new exhibitors, Pakistan has now climbed to the fourth position among participating countries, following China, India, and Turkey. This achievement was made possible by relocating Pakistani exhibitors to Halls 8 and 9.
Given the growing interest in textiles, allocating additional space for the new carpet hall – which already features exhibitors from Belgium, Turkey, and India – can further enhance opportunities for Pakistani companies. This expansion will provide Pakistan’s textile industry with a platform to showcase its unique craftsmanship and modern carpet designs, solidifying its presence in the global market.
To ensure seamless participation, Messe Frankfurt’s Pakistan sales partner, in collaboration with the German Embassy in Islamabad and the German Consulate General in Karachi, has secured special visa appointments for 400 participants. This initiative streamlines logistics for exhibitors, allowing them to focus on making a lasting impact at the trade fair. This effort reflects the strong partnership between Pakistan and Germany, paving the way for smooth trade interactions.
Kaleem Baig, General Manager, and Sumaira Liaqat, Business Development Manager Messe Frankfurt Pakistan, who will also be attending the show, said, ‘Shifting the halls from 10 to 8 and 9 has helped us accommodate our waiting list. We had a large number of exhibitors who had been waiting for years, and we have finally been able to accommodate them. With higher ceilings in halls 8 and 9, most exhibitors have also increased the size of their booths, allowing them to showcase their products in a more open and inviting manner.’
Further adding on this occasion, Heimtextil’s Director, Margit Herberth, will be making special tours of halls 8 and 9 to personally welcome and facilitate the Pakistani delegation, and will further emphasize the significance of Pakistan’s participation in this year’s event.
During a telephonic conversation with cotton analyst Naseem Usman, Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute, Multan, underscored the critical need for substantial funding to advance cotton research and development. He highlighted the necessity of developing seed technologies that offer higher yield potential, resilience against pests such as whiteflies and pink bollworms, and adaptability to the challenges posed by climate change.
Sajid Mahmood emphasised the pivotal role of the textile industry in driving the revival and growth of the cotton sector. He pointed out that in major cotton-producing nations robust partnerships exist between the textile industry and research institutions. These collaborations provide essential funding, state-of-the-art technologies, and support for research initiatives, facilitating the development of superior seed varieties, enhanced disease resistance, and increased productivity.
He noted that countries like the United States, China, India, and Australia have successfully boosted their cotton industries by fostering strong linkages between their textile sectors and research organisations. These partnerships, through financial and technical assistance, have proven instrumental in enhancing national cotton production and achieving sustainable growth.
Sajid Mahmood further shared that Kamran Arshad, Chairman of the All Pakistan Textile Mills Association (APTMA), has expressed full commitment to supporting cotton’s promotion and development. The APTMA chairman assured the resumption of regular payments of the cotton cess to the Pakistan Central Cotton Committee (PCCC) starting January 1, 2025, and indicated positive progress in resolving outstanding cess dues. Federal Minister for National Food Security and Research, Rana Tanveer Hussain, has played a vital role in advancing these efforts.
He concluded by emphasising that the sustainable development of the cotton sector hinges on effective public-private partnerships. In this context, representatives from the Pakistan Cotton Ginners Association (PCGA) and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) are also actively contributing to the restoration of the cotton industry.
Sajid Mahmood stressed that collaborative and coordinated efforts among all stakeholders are essential to ensure the long-term progress and prosperity of the cotton sector in Pakistan.
Furthermore, the Indian government’s Cotton Corporation of India (CCI) has implemented an effective support price system for farmers. This system provides farmers with economic security. When cotton prices in the market fall below the government-mandated minimum support price (MSP), the CCI intervenes by purchasing cotton from farmers. This not only ensures that farmers receive a fair price for their hard work but also protects them from market uncertainties.
In the current season, the CCI purchased 3.098 million bales, with the highest contribution coming from farmers in Telangana. Farmers from Maharashtra, Andhra Pradesh, and Karnataka also benefited from this intervention. This action reflects a significant change compared to the last three years, where CCI intervention was limited.
This model can serve as a bright example for Pakistan. The Trading Corporation of Pakistan (TCP) should play the same role in Pakistan as the CCI does in India. If the TCP purchases cotton from farmers at a support price, not only will farmers receive a fair price for their hard work, but cotton production will also increase. This will restore farmers’ confidence and protect them from the effects of market uncertainties. Such a government-level system would be equivalent to injecting new life into the cotton industry.
Copyright Business Recorder, 2024
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