KARACHI: The rapid increase in cotton prices in the country gave a severe blow to the cotton industry. Cotton prices have surged by up to a thousand rupees, limiting business activity.
The situation has been further aggravated by a 33.27% decline in cotton production, with total production expected to be around 56 lac bales. Ginners only have a stock of 6 lac bales left, and the new crop is still 5-6 months away. Due to this shortage, ginners are demanding higher prices.
Textile spinners are cautious about higher prices and are only making deals on a measured basis. There is a possibility of increased cotton imports, but this will put further strain on the industry.
The government needs to develop a comprehensive strategy to increase cotton production. There was a lot of optimism tied to the Heimtextil exhibition, but the increase in energy prices has minimised those hopes.
Chairman Economic Policy and Business Development and former caretaker minister Gohar Ejaz has demanded reduction in energy prices.
It is also being asked why the import of cotton seed is banned in a country when the import of other seeds is allowed?
Over the past week, cotton prices in the local market have shown an upward trend. Due to the Pakistan Cotton Ginners Association’s estimate of a nearly 33.27% decrease in the country’s cotton production by December 31, ginners have increased cotton prices.
Needy spinners are also showing interest in purchasing, which may lead to further price increases for relatively better quality cotton in the coming days. This is because ginners have limited cotton stocks, and the new season is still five to six months away.
However, on the other hand, the import of cotton is increasing day by day. Spinners will have to make payments for imported cotton, as well, leading to a financial crisis. In addition to cotton, cotton yarn is also being imported in large quantities. Moreover, cloth is also being imported. Several local spinners will be interested in buying local cotton as it will be difficult for them to arrange dollars for imported cotton.
The local textile sector is continuously demanding that the Export Finance Scheme (EFS) facility, currently available for imported cotton and cotton yarn, be extended to locally produced cotton, as well.
Chairman Economic Policy and Business Development and former caretaker minister Gohar Ejaz in a press release said that the high cost of energy and other inputs as compared to our regional competitors makes it extremely difficult for our textile industry to compete in global market. Consequently, our textile exports are being adversely affected, and the industry is facing a crisis.
In Sindh the price of cotton is in between Rs. 18,000 to Rs. 19,000 per maund. The price of Phutti is in between Rs. 7,200 to Rs. 8,700 per 40 kg.
In Punjab the price of cotton is in between Rs18,000 to Rs. 19,000 per maund. The price of Phutti is in between Rs. 7,400 to Rs. 9,500 per 40 kg.
In Balochistan the prices of cotton is in between Rs.17,500 to Rs 18,700 per maund. The price of Phutti is in between Rs 7,500 to Rs 9,400 per 40 kg. The rate of Balochi cotton is in between Rs 19,000 to Rs 19,200 per maund. The rate of Primark cotton is in between Rs 19,000 to Rs 19,500 per maund. Prices of Binolla, Khal and oil; however, remained stable.
The Spot Rate Committee of the Karachi Cotton Association has increased the spot rate by Rs 5,00 per maund and closed it at Rs 18,000 per maund.
Nasim Usman, Chairman of the Karachi Cotton Brokers has said that there is a mixed trend in the international cotton market. The New York cotton futures price remained between 68 and 70 US cents per pound. According to the USDA’s weekly export sales report, one lac and twenty eighty thousand and nine hundred bales were sold for the 2024-2025 year.
Turkey topped the list by purchasing forty one thousand and three bales. Pakistan came in second with the purchase of thirty thousand bales, followed by Vietnam at the third spot with twenty six thousand and five hundred bales. For the 2025-2026 year, five thousand and three bales were sold, which were purchased by Honduras.
The price of cotton has increased by 500 rupees per maund, reaching a new price of 18,500 rupees. According to the Chairman of the Cotton Ginners Forum, Ehsan ul Haq, the price of cotton has risen by a thousand rupees per maund in the past week. He said that 270 Pakistani textile mills are expected to participate in the Heimtextil exhibition starting on January 14 in Germany. There are expectations of Pakistani mills that they will receive export orders worth millions of dollars at the exhibition. He said that textile mills are purchasing cotton in large quantities to fulfil their export orders.
However, the cotton crisis in the country further deepened in 2024.
The year 2024 marked a significant crisis for Pakistan’s cotton industry, with production and cultivation targets falling significantly short.
Sajid Mahmood, Head of Technology Transfer at the Central Cotton Research Institute Multan told Business Recorder that the cotton cultivation target for 2024 was set at 3.118 million hectares. However, only 1.974 million hectares were cultivated, achieving a mere 63% of the target.
He explained that cotton farmers faced numerous challenges this year, including the impacts of climate change, poor seed quality, and pest attacks. “Unusually low temperatures hindered seed germination, while extreme heat waves in June and July and unexpected rainfall further worsened the situation, severely affecting overall production,” he clarified.
Sajid Mahmood noted, “In Punjab, cotton was cultivated on 1.304 million hectares, achieving 78% of the target, while Sindh achieved 87% of its target. However, both provinces recorded a decrease in production compared to the previous year.”
Discussing the financial pressure on farmers, he highlighted, “In the absence of a support price, many farmers opted for more profitable crops like sugarcane and maize, further reducing the cotton cultivation area.”
He emphasized the urgent need for reforms to revive the cotton sector. He also said adopting modern agricultural technology, ensuring the availability of high-yielding certified seeds, and effective pest management strategies are crucial to address the fundamental challenges. He also stressed the importance of preparing for the impacts of climate change. Strategic planning to mitigate climate impacts and control crop diseases should become an integral part of agricultural policy.
Chairman Economic Policy and Business Development and former caretaker minister Gohar Ejaz has said that the reforms in the energy sector are inevitable. While comparing Pakistan’s power tariffs with other regional countries, he said that Pakistani power consumers are paying three and four times high tariffs as compared to Turkey and Egypt. He said Pakistan’s industrial sector is paying Rs44.56 per unit for electricity while in Egypt per unit rate has been Rs10.58 and in Turkey it is equal to Rs16.43.
Per unit electricity rate in Bangladesh has been Rs20.89, while the industries in India are supplied electricity at Rs23.39 per unit, he said. He said in Vietnam and Sri Lanka power price has been 23.67 rupees per unit. He urged the government to fix the electricity rate for consumers at Rs26 per unit. He said reforms are compulsory in the energy sector and called for review of the agreements with independent power producers (IPPs) and they should be given payments only on power generation. He demanded halting payments to those IPPs not producing electricity. He also urged privatisation of the power distribution companies running in losses.
Chairman of APTMA, Mian Kamran Arshad, has stated that there are currently 1400 fake cotton seed sellers in Pakistan, which has resulted in a decline in cotton production. He also expressed concern over the imposition of GST on local cotton and the exemption of imported cotton from GST.
He revealed that if all spinning mills in Pakistan operate at full capacity, the domestic consumption would be one crore and sixty lac bales, but unfortunately, 40% of the industry is currently shut down.
Mian Kamran Arshad stated that if textile exports are increased and we import cotton and yarn, spending foreign exchange in the process, then the increased exports will not benefit the national economy.
However, according to a Pakistan Cotton Ginners Association (PCGA) report, as of December 31, 2024, the total cotton arrivals in Pakistan stood at 5,452,250 bales, compared to 8,171,082 bales in the previous year, reflecting an overall decline of 33.27% in cotton production in 2024.
In Punjab, cotton production was limited to 2,658,828 bales, indicating a significant decrease of 34.81% compared to the 4,078,769 bales produced last year. In Sindh, cotton production also saw a decline of 31.74%, with 2,793,422 bales produced in 2024, down from 4,092,313 bales in 2023. In Balochistan, cotton arrivals were restricted to 156,500 bales.
The PCGA report highlights a considerable reduction in cotton production in 2024, which has adversely impacted the national economy, the textile industry, and the financial stability of farmers.
As a result, to meet the textile industry’s demands, over $2 billion worth of cotton will need to be imported, placing a significant burden on the national exchequer.
However, Sajid Mahmood Head Transfer of Technology Department Central Cotton Research Institute Multan said to address issue of the decline in cotton production, it is imperative to adopt a comprehensive and strategic approach. First and foremost, ensuring the availability of high-quality seeds is crucial to fostering the cultivation of cotton varieties with enhanced productivity, resistance to pests (particularly whitefly and pink bollworm), and adaptability to varying climatic conditions.
While Pakistan is home to approximately 800 seed companies, despite this a substantial number of unapproved varieties continue to be cultivated, exacerbating the decline in cotton production. These substandard varieties not only hinder production but also elevate the risk of pest and disease infestations. To mitigate this issue, it is essential to introduce stringent reforms in the registration process for seed companies. The registration process must be both rigorous and transparent, ensuring that only companies offering high-quality, and modern cotton seed varieties are approved.
Furthermore, mandatory practical testing and validation of seeds from each company should be instituted, with severe penalties for companies found supplying substandard seeds.
Moreover, regular performance evaluations of seed companies should be conducted, and a certification quality label system should be introduced for seed sales, ensuring that farmers only receive approved and standardized seeds. Public awareness campaigns should be launched to educate farmers on the advantages of using certified seeds and the risks associated with unapproved varieties. These initiatives will significantly enhance cotton production and ensure the consistent supply of high-quality seeds. Additionally, to strengthen cotton research and development efforts in Pakistan, a comprehensive federal-level strategy is urgently required.
In this regard, integrating the Pakistan Central Cotton Committee (PCCC) into the Pakistan Agricultural Research Council (PARC) and establishing a dedicated “Cotton Wing” would provide a focused platform for advancing the cotton sector. This integration would allow for better coordination of research and development resources, facilitating the adoption of advanced technologies and research to boost cotton production and quality. This approach will foster greater alignment between federal and provincial research activities, addressing the challenges faced by cotton farmers and contributing to the sustainable growth of the cotton industry in Pakistan.
Copyright Business Recorder, 2025
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