Weekly Cotton Review: Prices show slow movement as trade volume remains limited

KARACHI: Cotton prices show slow movement as trade volume remains limited.

The negotiations between All Pakistan Textile Mills Association (APTMA), Pakistan Cotton Ginners Association (PCGA) and the government regarding the Export Finance Scheme (EFS) have yet to yield any results. Reports indicate that due to frustration with the government, PCGA Chairman Dr Jassu Mal Limani was compelled to send an SOS call to the Army Chief.

Meanwhile, a high-level cotton delegation from Tanzania visited the Karachi Cotton Association, marking a productive engagement.

The consistent decline in cotton production and quality is emerging as a complex industrial, agricultural, and economic challenge. Experts emphasize that a solution is only possible through scientifically backed, coordinated measures, urging immediate and effective action.

On a positive note, textile group exports recorded a 9.38% increase from July to March, signaling a favorable trend for the industry.

During the past week, the local cotton market remained generally stable in terms of cotton prices. Some transactions were settled at rates ranging from 15,500 to 17,500 rupees per maund, depending on quality and payment conditions. However, most of the cotton trade involves import agreements. Additionally, yarn and fabric are also being imported, facilitated by the EFS (Export Finance Scheme), which is currently under negotiation between APTMA, PCGA, and the government, though no concrete outcome has been achieved so far. Nevertheless, due to delays from the government, businesses are being severely affected. It appears that PCGA, disappointed with the government, has reportedly sent an SOS to the Army Chief.

PCGA Chairman Dr. Jassu Mal Limani has sent a detailed letter outlining all the issues and requesting an immediate resolution to this serious matter.

According to received reports, early cotton sowing is underway in the provinces of Sindh and Punjab, but water scarcity remains an issue. In some areas of Sindh, water access is available, but the shortage has affected rice and sugarcane cultivation. The Sindh government has imposed certain restrictions on rice cultivation. In Punjab, reports indicate satisfactory sowing progress in several areas.

Recently, a textile machinery exhibition was held in Karachi where agreements and memoranda of understanding worth $550 million were signed. Over 500 international companies from more than 20 countries participated in the exhibition, showcasing advanced technologies. More than 67,000 trade representatives attended the event in one unit.

In the provinces of Sindh and Punjab, the price of cotton per maund is currently between 15,500 to 17,500 rupees, depending on quality and payment conditions.

The Spot Rate Committee of the Karachi Cotton increased the spot rate by Rs 200 per maund and closed it at Rs 16,700 per maund.

Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, told that international cotton prices remained stable. The price of Future Trading stayed between 67 to 68 American cents per pound. According to the USDA’s weekly production and sales report, 202,000 bales were sold for the 2024-25 season. Vietnam remained at the top by purchasing 90,900 bales. India secured the second position by buying 35,300 bales. Turkey ranked third with the purchase of 32,000 bales. Pakistan came in fourth place by acquiring 19,300 bales. For the 2025-26 season, 65,900 bales were sold. Pakistan led the purchases with 21,500 bales. Vietnam followed in second place with 11,700 bales, while Guatemala secured the third position by buying 11,100 bales.

Meanwhile, Chief of Army Staff (COAS) General Asim Munir should protect the national economy like the borders by achieving cotton production targets to strengthen it economically and bring back the era when Pakistan produced 15 million bales of 470 pounds.

This appeal was made by chairman of the PCGA Dr. Jassu Mal Limani in an open letter sent to him. He stated that the revival of the cotton economy is the survival of the nation, and Dr. Jassu Mal said that increasing cotton production will certainly change the country’s economic destiny. The restoration of cotton guarantees the country’s economic growth, prosperity, and stability. He proposed launching a campaign for maximum cotton cultivation and restricting or prohibiting the cultivation of other crops in cotton zones to bring vast areas under cotton crops. He said that the privileged class, for their personal interests, has converted cotton zones into sugarcane fields at the expense of farmers, ginners, and the textile industry.

He further added that cotton cultivation should be promoted through cooperative farming, as recently initiated by the army. In his letter addressed to the Chief of Army Staff, PCGA Chairman Dr. Jassu Mal stated that the misleading, impractical, and flawed policies of the rulers have destroyed our cotton economy, which had once reached its zenith in the past.

A Delegation from Tanzania Cotton Board headed by Marco Charles Mtunga, Director General, Tanzania Cotton Board visited The Karachi Cotton Association (KCA) on 17th April, 2025 to meet the Executive Committee and Senior Members of the KCA to discuss matters of mutual interest most particularly to explore more opportunities regarding import of cotton into Pakistan from Tanzania.

In his address of welcome presented to Marco Charles Mtunga, Director General, Tanzania Cotton Board, Jahangir Moghul, Vice-Chairman, the KCA apprised that the Karachi Cotton Association is one of the oldest trade Associations in Pakistan. It was setup in 1933 to provide necessary facilities for domestic and export trade in cotton. It is the premier body of the cotton trade in Pakistan and is composed of Cotton Growers, Ginners, Exporters, Spinners and Commission Houses etc. Unlike other trade bodies, it is a unique Association in the sense that it represents all segments of the cotton trade, he added.

Jahangir Moghul, Vice-Chairman, the KCA also apprised the Tanzanian Delegation about the Role and functions of the KCA in regulating marketing of cotton in detail and stated that after harvesting 14.26 million bales by Pakistan in 2004-05, the production of cotton in Pakistan gradually declined year after year. However, during the last 3-4 years a drastic declined in cotton production was witnessed in Pakistan. Hence, the local textile industry is compelled to import raw cotton from abroad to meet its rising requirement of basic / primary raw material.

In such a situation, Pakistan is one of buyer of Tanzanian Cotton and during the last 04 years, Pakistan had imported a considerable quantity of cotton from Tanzania to meet the requirement of Raw Cotton of local textile mills, he added.

Marco Charles Mtunga, Director General, Tanzania Cotton Board thanked the Vice-Chairman, the KCA for providing an opportunity to the delegation of Tanzania Cotton Board to visit the KCA on a very short notice and stated that Tanzania’s Cotton Production is largely driven by small farmers, with Shinyanga and Mwanza being the largest cotton-growing regions. He also stated that on average, 400,000 hectares are sown to cotton annually. The yields, however, are relatively low, the global average. The crop is primarily rain-fed, and production is affected by weather conditions, farm-gate prices, and the availability of inputs, extension services, and new technologies.

The KCA’s side stated that Pakistan is importing a considerable quantity of cotton from Tanzania and expressed its concern over the quality of Tanzanian cotton, packing of cotton bales. The KCA’s side also expressed its concern on the issues of traceability and sustainability of cotton being faced by the cotton importers in case of import of raw cotton from Tanzania.

Marco Charles Mtunga, Director General, Tanzania Cotton Board assured the KCA’s side that he would take-up the matter with the Government of Tanzania with a view to resolve the same in the best interest of the Pakistani importers of cotton.

Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute (CCRI), Multan, in a telephonic conversation with leading cotton analyst Naseem Usman, expressed deep concern over the persistent decline in both the production and quality of cotton in Pakistan. He emphasized that this trend has evolved into a complex industrial, agricultural, and economic challenge, which requires immediate and coordinated scientific interventions.

Highlighting the crucial role of ginning technology in preserving fiber quality, Sajid Mahmood pointed out that the majority of ginning factories in Pakistan continue to rely on outdated and substandard machinery. This not only damages the delicate cotton fibers but also significantly reduces their grading and market value. In contrast, he noted, modern automated ginning units used internationally ensure precise control over cleaning, fiber processing, and moisture content—standards that Pakistan has yet to widely adopt.

He further attributed the quality crisis to the lack of enforcement of the Cotton Control Act of 1966, which has rendered the systems of ginning regulation, transportation oversight, and quality assurance ineffective. Mahmood also lamented the absence of a structured quality-based pricing mechanism in Pakistan, which deprives farmers of any financial reward or motivation for producing superior quality cotton. Consequently, growers tend to prioritize yield quantity over quality, further deteriorating the overall standard of the crop.

Additionally, Mahmood highlighted the negative impact of employing untrained labor during the picking process. He explained that workers unfamiliar with essential practices—such as maintaining cleanliness, protecting moisture levels, and handling fragile fibers—often contaminate the cotton with dust, leaves, and dried plant material. This contamination diminishes the grade of the cotton and adversely affects Pakistan’s credibility in global markets.

He concluded by stressing that reclaiming Pakistan’s place in the international cotton trade and restoring the reputation of its cotton as “white gold” would require a multifaceted and scientific approach. Key steps, he said, include the technological upgradation of ginning units, strict implementation of existing laws, introduction of a quality-based incentive system for farmers, and comprehensive training for cotton pickers. Only through such an integrated strategy, Mahmood stated, can Pakistan strengthen its cotton sector and stabilize its agricultural economy.

The Pakistan Cotton Ginners Association (PCGA) and the All Pakistan Textile Mills Association have unanimously decided to introduce the National Cotton Policy (NCP). It has also been decided to bring the Pakistan Kissan Ittehad on board. Due to the policies of the previous government, over 120 spinning mills and more than 800 ginning factories have shut down. The government must immediately withdraw the Export Facilitation Scheme (EFS) and provide equal and fair business opportunities.

Addressing a joint press conference at the PCGA House, PCGA Chairman Dr Jassu Mal and APTMA Chairman Kamran Arshad stated that they would work together to revive ginning, spinning, and the textile sector, ensuring consultation with the Kissan Ittehad and making collective efforts. Former Chairman Haji Muhammad Akram, Chaudhry Waheed Arshad, and Sohail Mahmood Haral were also present on the occasion.

The government must immediately abolish local cotton and cotton yarn taxes. Under the Export Facilitation Scheme (EFS), sales tax and duties should be imposed on imported cotton, cotton yarn, and fabric. Due to inconsistent policies, Pakistan has fallen from fourth to eighth place among cotton-producing countries. With production costs significantly higher than those of the US, China, and India, Pakistan has been left out of the competitive race.

Over 70% of the country’s agricultural population depends on cotton as the sole cash crop for their livelihood. Due to a lack of government support and guidelines, cotton production has dropped to a historic low of five million bales. All taxes imposed by the government are being passed on to farmers, burdening them financially and discouraging cultivation.

Copyright Business Recorder, 2025