Rehan expresses concern over sealing of cotton exchange building

KARACHI: President Karachi Chamber of Commerce and Industry (KCCI), Muhammad Rehan Hanif, while expressing deep concern over the continued sealing and forceful occupation of the historic Cotton Exchange Building, stated that it has inflicted severe damage on Pakistan’s cotton trade, disrupted the operations of hundreds of businesses, and created an atmosphere of uncertainty that threatens the country’s export economy and investment climate.

Rehan Hanif stated that KCCI continues to receive overwhelming number of complaints from its member firms who have been directly affected by the abrupt closure of the Cotton Exchange Building.

A total of 209 commercial offices, many of which have been operating continuously since the creation of Pakistan in 1947, have been rendered dysfunctional overnight.

These offices comprise importers, exporters, cotton brokers, traders, commission agents, textile-related businesses and numerous enterprises associated with Pakistan’s cotton value chain.

The sudden sealing has not only brought their commercial activities to a standstill but has also caused enormous financial losses, contractual complications, reputational damage and uncertainty regarding the future of their businesses.

President KCCI observed that the Cotton Exchange Building wherein the Karachi Cotton Association (KCA), operated has historically remained the backbone of Pakistan’s organized cotton marketing system and has played an indispensable role in bringing together growers, ginners, textile manufacturers, exporters, brokers and other stakeholders under a transparent and internationally recognized trading framework.

He pointed out that Pakistan now finds itself in an unprecedented and highly embarrassing position of becoming perhaps the only cotton-producing country in the world without a functioning cotton exchange. Such a situation, he remarked, sends an extremely disturbing message to international buyers, foreign investors and global trading partners regarding the institutional stability of Pakistan’s agricultural and export sectors.

Rehan Hanif recalled that the Karachi Cotton Exchange had served as the country’s principal platform for organized cotton trading and transparent price discovery since 1934, even before Pakistan’s independence.

Following the creation of Pakistan in 1947, it continued to play a pivotal role in the cotton economy until its operations came to a complete halt nearly a year ago.

Although hedge trading was discontinued in 1976, the Exchange continued to perform the critical responsibility of announcing daily cotton spot rates that served as the benchmark for the entire cotton economy. These rates were relied upon by cotton growers, ginners, textile mills, exporters, financial institutions and policymakers throughout Pakistan. Approximately 320 registered cotton brokers remained actively associated with the Exchange until its abrupt closure.

“The suspension of these vital market functions has disrupted price transparency, weakened market confidence and created unnecessary uncertainty within Pakistan’s cotton trading system at a time when the country desperately needs stronger institutions to revive agricultural exports and industrial growth”, he added.

Rehan Hanif noted that historical records clearly indicate that the land upon which the Cotton Exchange Building stands was originally leased in 1883, while the Karachi Cotton Association formally acquired the property through a registered conveyance deed in 1936, with the lease subsequently renewed until 2081. These longstanding legal arrangements, he said, further reinforce the need for resolving the matter strictly through lawful procedures, judicial fairness and institutional transparency.

Rehan Hanif also expressed concern over the reported non-compliance with the Sindh High Court’s order dated 18 June 2026, which had allowed the Karachi Cotton Association to continue its business activities from the Cotton Exchange Building until final adjudication of the matter.

He urged the concerned authorities to ensure immediate implementation of the Court’s directions and uphold the rule of law.

President KCCI also highlighted that the internationally acclaimed KCA HVI Laboratory, recognized for its excellence in cotton fiber testing and quality assessment, has also been adversely affected by the closure.

The laboratory has earned international recognition for maintaining world-class testing standards and has significantly contributed towards enhancing the quality, credibility and competitiveness of Pakistani cotton in international markets.

Any prolonged disruption of its operations could have far-reaching implications for Pakistan’s textile exports and quality assurance systems.

Calling for immediate corrective measures,

Rehan Hanif urged the federal government and all concerned authorities to intervene without delay to ensure the earliest possible restoration of possession of the Cotton Exchange Building to the KCA and its lawful occupants.

He stressed that the matter should be resolved strictly in accordance with the Constitution and applicable laws, while ensuring complete protection of the legitimate rights and business interests of all affected stakeholders.

Copyright Business Recorder, 2026