KARACHI: The cotton market continues to witness a persistent decline in prices, with a noticeable drop in spot rates and a slowdown in business activities. Experts have highlighted the urgent need to abolish the Export Finance Scheme (EFS) and the 18% sales tax, expressing hope that these issues will be addressed and eliminated in the upcoming budget.
Malik Talat Sohail of FPCCI has said that the Prime Minister’s special attention to the revival of the cotton sector has been widely welcomed as a positive step.
Head of the Technology Transfer Department at the Central Cotton Research Institute, Multan, Sajid Mahmood emphasised that a concrete strategy is essential for the restoration of the cotton industry, as paper-based plans alone are insufficient.
Furthermore, reports suggest that cotton cultivation is being adversely affected due to delays in sowing and a shortage or unavailability of canal water.
Cotton Ginners Forum Chairman Ahsan ul Haq warned that spinning mills and cotton factories face the risk of becoming inactive during the 2025-26 cotton season if these issues are not resolved promptly.
Last week, the local cotton market witnessed a continued decline in prices, with trading volumes remaining limited. However, there has been some improvement in New York cotton futures following recent fluctuations. Textile mills are increasingly showing interest in imported cotton, as well as, cotton yarn and fabric, due to better quality, lower prices, and the availability of the Export Facilitation Scheme (EFS). In contrast, an 18% sales tax is imposed on local cotton making it non-attractive for local buyers.
According to recent reports, a meeting was held in Islamabad to discuss matters related to the EFS. Additionally, there are reports of a potential reduction in energy prices. Meanwhile, ginners holding cotton stocks are facing uncertainty and anxiety about the market situation.
Efforts are being made to promote early sowing for the upcoming 2025-26 cotton season. Early cultivation is already under way in some areas of Sindh, while Punjab has also begun sowing early cotton. The Punjab government has set a target to produce early cotton on 1 million acres of land.
The cultivation of cotton in major cotton zones has once again come under threat due to an unprecedented decline in water levels in dams. The expected delay in the new cotton crop has also led to stagnation in trading activities for the upcoming harvest. Chairman of the Cotton Ginners Forum, Ahsan ul Haq, reported that water reserves in Pakistan’s two major dams have reached “dead levels,” causing a shortage or complete unavailability of canal water in several districts of Sindh. This has severely impacted cotton cultivation in the region.
In Sindh, the price of cotton ranged between 16,000 to 17,000 rupees per maund, depending on quality and payment conditions. Meanwhile, in Punjab, cotton prices remained between 16,500 to 17,200 rupees per maund.
In a related development, the Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by 200 rupees, closing it at 16,800 rupees per maund.
Karachi Cotton Brokers Forum Chairman Naseem Usman said that the international cotton market has shown a mixed trend overall, with New York cotton futures trading between 66.00 to 67.50 American cents per pound.
According to the USDA’s weekly export and sales report, sales for the 2024-25 season reached 110,100 bales. Vietnam led the purchases with 73,100 bales, followed by Pakistan with 18,300 bales, and Turkey with 18,000 bales, securing the third position. For the 2025-26 season, 57,900 bales were sold with Guatemala topping the list by purchasing 19,200 bales. Bangladesh followed with 9,900 bales, and Turkey again took the third spot with 8,900 bales.
Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute, Multan, has emphasised that Pakistan’s cotton industry is facing a multifaceted yet resolvable crisis. The primary factors contributing to this decline include a lack of coordination among research institutions, institutional inefficiencies, dominance of individual interests, and a severe deficiency in knowledge-sharing mechanisms. The Pakistan Central Cotton Committee (PCCC), the apex body for cotton research and development, has been rendered ineffective due to financial and administrative constraints. Consequently, national cotton production has plummeted from 15 million bales to a mere 5 million bales. Despite the presence of over 22 public and private research institutions and more than 1,200 seed companies engaged in cotton research, their efforts remain fragmented, failing to yield meaningful outcomes due to the absence of a cohesive and well-defined strategy.
Sajid Mahmood underscored that the fundamental issue is not resource scarcity but rather their inefficient utilization, compounded by institutional rivalry. The lack of strategic collaboration, absence of a unified policy and prevailing inter-organisational competition has further exacerbated the crisis, impeding scientific progress and innovation.
To address these pressing challenges, he advocated for a comprehensive, well-integrated policy framework cantered on revitalising PCCC. This entails ensuring adequate financial support, modernising the existing research infrastructure in alignment with contemporary scientific advancements, and strengthening human resources by inducting highly qualified agricultural scientists and experts. Furthermore, he emphasised the need to consolidate all research and development entities under the PCCC’s umbrella, fostering a structured and harmonized strategy to translate research into practical solutions. A transparent and efficient information exchange system is crucial to fostering institutional synergy while eliminating counterproductive competition.
Sajid Mahmood asserted that PCCC is not merely an institution but a national asset integral to the advancement of cotton research, development, and sustainability. A weakened PCCC equates to a weakened cotton sector, with far-reaching implications for farmers, the textile industry, exports, and the broader economy. He urged all stakeholders— including the government, textile sector, research institutions, and farmers— to recognise that a fully empowered and well-functioning PCCC is vital for restoring Pakistan’s cotton production, ultimately serving their collective interests. It is imperative to set aside personal agendas and institutional differences to reinstate PCCC to its rightful stature, as a robust and autonomous PCCC is the cornerstone of Pakistan’s resurgence in the global cotton market.
Copyright Business Recorder, 2025
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