Weekly Cotton Review: Spot prices fall by Rs300/maund amid fresh pressure
KARACHI: Cotton prices came under fresh pressure in the local market, with the spot rate falling by Rs300 per maund. Prices also weakened in New York. Pakistan’s textile industry remains in serious difficulty, and the power loom sector is in deep crisis, with industry sources saying 40 to 50 per cent of looms have shut down, leaving hundreds of thousands of workers jobless.
Sajid Mahmood said the Pakistan Central Cotton Committee (PCCC) is neither defunct nor inactive and continues to operate. The real problem, he argued, is not its performance but a severe financial crisis hampering its work.
Separately, Prem Chand Kohistani was recognised for representing the United Business Group (UBG) at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and for his role as Vice Chairman of the Karachi Cotton Association (KCA).
Textile industry stakeholders have urged the Prime Minister to act without delay in response to the new phase of the Generalised Scheme of Preferences Plus (GSP+). They warned that mounting challenges are hurting exports, industrial output and jobs, and called on the government to introduce effective policy measures to support the sector and halt further decline.
The cotton industry also faces the threat of severe disruption. Industry representatives voiced alarm over unannounced raids by the Federal Board of Revenue (FBR) on ginning factories, warning that such action could disrupt business and deepen the sector’s troubles. They called for a more supportive and predictable regulatory environment.
The alleged illegal occupation of the Cotton Exchange Building by the Federal Investigation Agency (FIA) has become another flashpoint. Stakeholders say the matter remains unresolved despite what they describe as clear orders from the Sindh High Court, and they have demanded that the court’s directions be implemented and the dispute settled in accordance with the law.
Meanwhile, the Towel Manufacturers Association (TMA) said action is being taken against exporters accused of harming Pakistan’s towel exports, including suspension and blacklisting. The association said the measures are necessary to protect export interests, preserve business credibility and safeguard the reputation of Pakistan’s towel industry in international markets.
Cotton prices in the local market remained under pressure over the past week, driven by rising output and weak quality, while the country’s textile and ginning industries continued to struggle.
According to the Pakistan Cotton Ginners Association (PCGA), cotton production reached 4.1 million bales by October 15, about 7.5 per cent higher than in the same period last year. The increase is seen as one factor weighing on prices. Ginners expect this year’s total output to surpass last year’s, helped by hot weather, but say the quality of the crop is comparatively poor, adding to the downward pressure.
Meanwhile, the textile sector remains in severe crisis. High interest rates and rising energy costs have pushed up production costs, forcing several mills to operate below installed capacity. The power loom sector is in particularly bad shape: reports from Faisalabad indicate that 40 to 50 per cent of the city’s power looms are no longer operating. Power loom owners estimate that around 100,000 workers have lost their jobs as a result. Industry representatives also say the unchecked import of yarn and fabric, without the requirement of the Export Facilitation Scheme (EFS), has further eroded the competitiveness of local producers.
The ginning sector faces added difficulties from raids and inspections at factories by the Federal Board of Revenue (FBR), which have alarmed industry stakeholders. The PCGA chairman and other office-bearers held a press conference to protest the actions.
Experts say the cotton crop and related industries, including the All Pakistan Textile Mills Association (APTMA), ginners and the wider business community, have faced serious challenges for years. They argue that government neglect has badly hurt cotton production, while steadily rising input costs have burdened growers. As a prominent example, they point to the establishment of sugar mills in many traditional cotton-growing areas, which they say has seriously damaged cultivation and output.
Experts also criticised the government’s handling of the historic Cotton Exchange building, a symbol of Pakistan’s cotton trade for 80 years. They allege it was illegally occupied and handed over to the Federal Investigation Agency (FIA). Industry representatives say such developments reflect a broader failure to protect the country’s cotton heritage and are eroding cotton’s historic identity.
Cotton prices in Sindh and Punjab are varying by roughly Rs2,000 depending on quality and payment terms, with cotton trading between Rs16,500 and Rs18,500 per maund. Seed cotton (phutti) is fetching between Rs7,000 and Rs9,200 per 40 kilograms. In Balochistan, cotton is trading between Rs17,600 and Rs18,200 per maund, while seed cotton is selling between Rs7,200 and Rs9,400.
The Spot Rate Committee of the Karachi Cotton Association cut the spot rate by Rs300 per maund and closed it at Rs18,000 per maund.
Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said international cotton prices followed a mixed trend overall. New York cotton is trading between 80 and 86 US cents per pound.
According to the US Department of Agriculture’s weekly export sales report, 199,600 bales were sold for the 2026-27 marketing year.
Vietnam led the buyers with 94,500 bales, followed by Bangladesh with 34,200 bales, Turkey with 33,700 bales and Pakistan with 15,300 bales.
Exports for the week totalled 196,400 bales. Vietnam was the top destination with 78,900 bales, followed by Pakistan with 26,400 bales and Turkey with 18,600 bales.
The country’s cotton and ginning sector faces complete operational paralysis as factory owners threaten nationwide shutdowns and strikes after the Federal Board of Revenue (FBR) conducted unannounced raids and record seizures in Sindh.
The aggressive tax enforcement actions, carried out without prior notice in key cotton-producing hubs, including Sanghar, Tando Adam, and Shahdadpur, have triggered widespread panic across industry, forcing several ginning factories to abruptly halt production amid an already severe economic slump.
Addressing a press conference at PCGA House in Multan, Pakistan Cotton Ginners Association (PCGA) Chairman Sohail Mehmood Harral, flanked by central leadership, warned that the business community would have no choice but to shut down all operating facilities if the harassment under the Regional Tax Office (RTO) Hyderabad jurisdiction is not halted immediately.
Expressing grave concerns, PCGA officials reported that tax authorities forcibly broke factory locks and confiscated financial records, bypassing legal notice procedures.
Cotton Ginners Forum Chairman Ihsanul Haq confirmed that these heavy-handed tactics have sent shockwaves across both ginning and oil mill operations nationwide, threatening to derail the ongoing harvest season.
The crackdown comes as the sector is already crippled by exorbitant electricity tariffs, rising production costs, and a crushing sales tax burden of 18 to 22 per cent.
Industrialists pointed out that over 100 ginning factories have become non-functional in 2025-26 alone, bringing the cumulative total of closed facilities to over 500 ginning units, nearly 700 oil mills, 175 textile mills, and hundreds of power looms across Pakistan.
While praising RTOs in Multan and Bahawalpur for choosing dialogue over coercive action, Mr Harral urged the government to replace raids with standard legal notices, giving mill owners a fair opportunity to comply without disrupting industrial activity.
Speaking during a private telephone conversation with Naseem Usman, President of the Cotton Brokers Association, regarding the performance of the Pakistan Central Cotton Committee (PCCC), its challenges and possible solutions, as well as the proposed establishment of a Cotton Board, cotton expert Sajid Mahmood stated that the PCCC was not defunct but remained operational and continued to perform its functions. He said its fundamental problem was not merely one of performance but a prolonged financial crisis, primarily driven by outstanding Cotton Cess arrears and related legal disputes. Despite these difficulties, the PCCC’s two major research institutions, the Central Cotton Research Institute (CCRI), Multan and CCRI Sakrand, continue to contribute to cotton research and the development of new varieties despite limited resources.
Emphasising the importance of the Ministry of National Food Security and Research, Sajid Mahmood said that effective ministerial patronage and guidance could facilitate a comprehensive and sustainable strategy to resolve the PCCC’s financial difficulties, stabilise its research activities and support the revival of the cotton sector. He appreciated the recent efforts of the Federal Minister for National Food Security and Research to address the longstanding problems faced by the PCCC. He also expressed the hope that the Ministry would play an effective role in bringing relevant institutions and the textile industry together under a common course of action. This would help make full use of the PCCC’s research capabilities and strengthen Pakistan’s cotton sector on a sustainable footing.
According to Sajid Mahmood, CCRI Multan in Punjab and CCRI Sakrand in Sindh developed 14 new cotton varieties between 2021 and 2025 and completed the requisite approval processes. During the current season, CRIS-682, developed by CCRI Sakrand, has gained considerable popularity in Sindh. Reports indicate that the variety has spread to approximately 50 to 60 per cent of the province’s total cotton-growing area. Furthermore, agreements reportedly signed by around 65 private seed companies with CCRI Sakrand for the marketing and multiplication of CRIS-682 indicate its commercial acceptance and growing market demand.
Similarly, CYTO-547, developed by CCRI Multan, has attracted the attention of farmers in Punjab and has been cultivated over hundreds of thousands of acres. Its yield potential and ginning outturn are among its notable characteristics. However, there remains scope for further improvement in fibre length and other industrial quality parameters. Continuous research and selection are therefore required to develop improved lines that combine higher yields with the quality standards demanded by the textile industry. This demonstrates that cotton research must extend beyond laboratory trials and varietal approval. Its ultimate objective is to develop varieties that are profitable for farmers while supplying quality raw material to the textile industry.
Discussing the proposed establishment of a Cotton Board during his private conversation with Naseem Usman, Sajid Mahmood stated that if the textile industry proposed allocating 70 per cent of Cotton Cess revenue to cotton research and development (R&D), it would also need to present a clear and workable plan explaining how the remaining 30 per cent would cover the institution’s administrative expenses, salaries of agricultural scientists and other employees, pensions and outstanding liabilities. He questioned how salaries, pensions and other obligations could be fully met from such a limited allocation. Merely specifying a budgetary distribution ratio was insufficient. A comprehensive financial strategy was essential.
He said that allocating resources to research and development was a welcome proposal, but it was equally important to explain how the institution’s core operating expenses, employee salaries and pension payments would be secured. If salaries and pensions remained uncertain, how could continuity in research be maintained and its intended benefits realised? Agricultural scientists engaged in research and other employees were integral to the PCCC. Expecting research and development targets to be achieved without resolving their problems would be unrealistic.
Sajid Mahmood maintained that payment of the Cotton Cess was a legal obligation. The central question was not simply whether the textile industry was paying the cess, but also the extent to which all amounts due were being paid and the status of outstanding arrears from previous years. The final determination of the outstanding amount, estimated at approximately Rs 2.5 billion, should be made in light of the relevant financial records and legal proceedings.
He said that the discharge of legal liabilities and reform of the PCCC’s administrative structure were two separate matters. The textile industry was entitled to put forward its proposals, but financial contributions or payment of the cess could not, in themselves, justify administrative dominance over the institution. According to him, the Cotton Cess rate had remained fixed at Rs 50 per bale since 2011, while inflation and operating costs had increased several times over during the same period. Any assessment of the institution’s financial sustainability must therefore take into account the cess rate, collections, outstanding arrears and expenditure in their entirety.
According to Sajid Mahmood, the fundamental question was whether the textile industry sought a partnership in research and development or also wanted a role in the PCCC’s administrative decisions. If a proposal was made to allocate 70 per cent of resources to research, a clear and workable plan would also be required for the use of the remaining 30 per cent, including salaries, pensions, previous liabilities and future operating expenses. It must also be determined who would meet the institution’s essential costs if Cotton Cess collections were disrupted in the future. Without answers to these questions, no proposal could qualify as a complete reform plan.
He stated that research and development should not be pitted against the institution’s administrative expenditure. Research can progress effectively only when the research institution is financially stable, scientists and employees receive their salaries on time and a reliable mechanism exists for meeting essential obligations, including pensions. The benefits of research can be realised only when research activities continue uninterrupted and their outcomes translate into improved cotton productivity and higher incomes for farmers.
Sajid Mahmood said that reform of the PCCC was necessary, but the remaining financial requirements of the institution could not be ignored in the name of reform by prioritising one area over all others. If the textile industry sought a broader role, that role must be accompanied by clearly defined financial responsibilities, limits on authority and an effective accountability framework. Otherwise, its role should remain confined to partnership in research and development.
He emphasised that demanding complete control while accepting only partial responsibility was not a balanced principle of institutional reform. It was essential to maintain a balance between authority and responsibility and to give equal consideration to research and development, employees’ rights, legal liabilities and the institution’s financial stability when making decisions about the PCCC’s future. In the interest of Pakistan’s economy and cotton sector, what was needed was not a partial solution but a comprehensive strategy capable of keeping the institution functional, financially sustainable and effective in carrying out its research mandate.
The Pakistan Textile Council (PTC) has called for urgent federal and provincial action to secure Pakistan’s preferential access to the European Union market beyond December 2028, warning of growing competition and stricter scrutiny of compliance with existing international commitments.
In a letter to Prime Minister Shehbaz Sharif dated October 22, PTC Chairman Fawad Anwar sought directives to all relevant ministries, divisions and provincial governments to undertake measures necessary to retain the country’s GSP+ status under the EU’s revised Generalised Scheme of Preferences.
The appeal comes as the EU-27 accounted for $7.103 billion, or 39.5 percent, of Pakistan’s total textile and apparel exports of $18.004 billion in FY2025-26, exceeding shipments to the United States and United Kingdom combined.
Although textile exports to the bloc declined 2 percent during the fiscal year, shipments increased 3 percent to $1.954 billion in July-September 2026, supported by exports of towels, men’s cotton trousers and bed covers.
Prominent business figures visited Kohistan House to congratulate Prem Chand Kohistani on his election as Vice Chairman of the Karachi Cotton Association (KCA) and on his nomination to represent the association at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). Mr. Kohistani is also the Group Leader of the Pakistan Progressive Ginners Group (PPG) of the Pakistan Cotton Ginners Association (PCGA).
The visiting delegation included Khalid Tawab, President of the United Business Group (UBG); Bilal Khan, Vice Chairman of the FPCCI; and Mian Zahid Hussain. Seth Jethanand Kohistani, former Chairman of the Pakistan Cotton Ginners Association, welcomed the distinguished guests on arrival.
Several other notable figures from the cotton and business community attended the gathering. They included Muhammad Rizwan, Senior Vice Chairman of the Karachi Cotton Association; Khawaja Muhammad Zubair, a former chairman; and Vinod Kumar Kewlani, an Executive Member of the Pakistan Cotton Ginners Association. Former Executive Committee members of the PCGA, Dr. Asar Das and Kishan Chand, were also present, along with Harish Sukhija and other dignitaries.
During the meeting, the participants held detailed discussions on the challenges facing trade and industry, as well as on measures to revive the country’s cotton sector. At the conclusion of the visit, Seth Jethanand Kohistani presented the guests with the traditional Sindhi Ajrak as a gesture of respect and hospitality.
Copyright Business Recorder, 2026
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