Weekly cotton review: Market witnesses return of bullish sentiment

KARACHI: The cotton market witnessed a return of bullish sentiment on Saturday after a period of price decline, as intense heat, water shortages, and a lack of rainfall continued to disrupt the supply of raw cotton across producing regions.

The reduced availability of phutti led to improved trading activity throughout the day.

The spot rate rose by three hundred rupees per maund, closing at seventeen thousand eight hundred rupees per maund.

Meanwhile, Pakistan’s textile exports suffered a setback in June, even though the sector recorded an overall increase in exports for the year so far. Industry representatives have also raised concerns over the additional tariff imposed on electricity, which they say is costing the textile industry fifty-five billion rupees annually.

In a separate development, the Sindh High Court has recused itself from hearing a contempt of court petition concerning the alleged illegal occupation of the Cotton Exchange Building by the Federal Investigation Agency.

Industry stakeholders have also voiced serious concern over the continued establishment of sugar mills in cotton-growing areas, warning that this practice is inflicting significant damage on the cotton crop, a commodity of considerable importance to the national economy due to the valuable foreign exchange it generates. According to a recent report, the country is expected to produce one million tons of surplus sugar by November. Critics warn that importing sugar at lower prices, as has happened in the past, could once again result in financial losses for the country. They are calling for accountability and a serious reassessment of national priorities, questioning whether cotton or sugar deserves greater importance in the country’s economic planning.

The market saw a slightly bearish tone develop by Saturday evening, attributed to overall pressure.

The local cotton market experienced a mixed week, opening with a downward trend before recovering to close on a bullish note, as prices ultimately stabilized after a period of fluctuation.

The Karachi Cotton Association’s Spot Rate Committee raised the spot rate by Rs 300 per maund, settling the week at Rs 17,800 per maund. Across the country, prices varied by region. In Sindh, cotton sold between Rs 17,700 and Rs 17,800 per maund, with phutti, or seed cotton, fetching Rs 8,000 to Rs 8,500 per 40 kg. Punjab recorded slightly higher rates, with cotton trading between Rs 17,800 and Rs 18,000 per maund and phutti between Rs 8,500 and Rs 9,000 per 40 kg. In Balochistan, cotton prices stood at Rs 17,700 to Rs 17,800 per maund, while phutti sold for Rs 8,800 to Rs 9,000 per 40 kg.

Trading activity picked up pace during the week, with a growing number of textile mills entering the market to purchase cotton. However, industry reports point to a worrying decline in crop quality in Sindh, where prolonged dry spells have left the province in urgent need of water and rainfall. By contrast, the cotton crop in Punjab is said to be faring comparatively better this season, with its staple length now surpassing that of Sindh’s produce. This marks a reversal from previous years, when Punjab’s cotton had struggled with quality issues while Sindh consistently produced superior fibre. Industry sources attribute this year’s shift to the unusually intense heat and acute water shortages that have hit Sindh’s crop particularly hard.

Adding to the sector’s troubles, cotton-growing areas are increasingly being converted to sugarcane cultivation, further squeezing the crop’s already shrinking footprint. Experts warn this trend poses a serious risk to the textile industry, which depends on cotton to keep its ginning factories operational and to produce value-added garments for export, a key source of foreign exchange for the country. The shortfall in domestic output has forced Pakistan to import an estimated 5 to 6 million bales of cotton annually to meet the needs of local textile mills.

Cotton also serves as a major source of edible oil, which likewise now needs to be imported to cover the gap left by declining local production.

The Spot Rate Committee of the Karachi Karachi increased the Spot rate by Rs 3,00 per maund and closed it at Rs 17,800 per maund.

Chairman of the Karachi Cotton Brokers Forum Naseem Usman has stated that the New York cotton futures rate is fluctuating between 72 and 78 American cents per pound. According to the weekly export and sales report issued by the USDA, 49,000 bales were sold for the year 2025-26.

Vietnam remained at the top by purchasing 23,200 bales. India stood second by purchasing 7,400 bales. Pakistan ranked third by purchasing 5,900 bales.

For the year 2026-27, 44,100 bales were sold. Honduras remained at the top by purchasing 11,300 bales. Guatemala stood second by purchasing 9,300 bales. Turkey ranked third by purchasing 6,800 bales.

Exports totalled 218,800 bales. Vietnam remained at the top by importing 57,300 bales. Turkey stood second by importing 49,800 bales. Pakistan ranked third by importing 31,600 bales.

Leading trade bodies have formally protested the continued illegal occupation of the Karachi Cotton Exchange building, despite a Sindh High Court order directing its evacuation. The Pakistan Cotton Ginners Association, Pakistan Cotton Brokers Association, All Pakistan Textile Mills Association, Karachi Chamber of Commerce and Industry, and Federation of Pakistan Chambers of Commerce and Industry have all written letters on the matter.

According to representatives of the affected parties, the Sindh High Court had directed the Federal Investigation Agency to vacate the building without delay. However, the FIA has continued to occupy the premises in disregard of that directive. The stakeholders have called on the court to take notice of the continued non-compliance.

In a related development, the constitutional bench of the Sindh High Court recused itself from hearing a contempt of court petition filed over the failure to restore possession of the building to its rightful occupants. The petition has been referred to the Chief Justice for assignment to another bench.

Meanwhile, official trade figures show that Pakistan’s textile exports declined in June. Exports for the month stood at one billion, two hundred and eighty-two million dollars, down from one billion, five hundred and twenty-two million dollars in June last year. For the full fiscal year 2025-26, textile exports totalled seventeen billion, nine hundred and seventy million dollars, only slightly higher than the seventeen billion, nine hundred and ten million dollars recorded the previous year.

Separately, the Pakistan Textile Exporters Association has raised concerns over electricity pricing for industrial consumers. Patron-in-Chief Khurram Mukhtar and Chairman Sohail Pasha have called on the federal government and the National Electric Power Regulatory Authority to address what they described as a long-standing irregularity in power tariffs. They noted that industrial consumers in the B3 and B4 categories are being charged nearly four rupees per kilowatt-hour above the actual cost, adding an estimated fifty-five billion rupees a year to the industry’s expenses. They argued that the pricing structure is technically unjustified, since high-voltage consumers place lower demands on transmission and distribution infrastructure and should not be subject to a higher tariff burden as a result.

Chief Minister Punjab Maryam Nawaz has been presented with a comprehensive report on the country’s sugar stocks, covering figures up to July 3. According to the report, the sugar industry currently holds reserves of 2.8 million tonnes of sugar, valued at Rs 298 billion, which officials say will be sufficient to meet domestic demand until the new crushing season begins on November 25. The report also notes an additional surplus of 800,000 tonnes of sugar, while Punjab alone produced 5.1 million metric tonnes of sugar this season, worth Rs 695 billion.

Details of the report further reveal that the country’s overall sugar stock currently stands at 3.6 million metric tonnes, against an estimated national requirement of around 2.8 million metric tonnes until the next crushing season commences on November 25, 2026.

The report has, however, drawn attention to a wider economic concern regarding the cotton crop, which is considered a major source of foreign exchange earnings for the country. Officials cautioned that by November, the country is projected to have a surplus of one million tonnes of sugar, raising fears that authorities may once again resort to importing sugar at lower prices, a move that critics say previously caused significant financial losses to the national economy.

The development has prompted renewed calls for accountability, with observers questioning why cotton production, seen as more economically vital, continues to be overshadowed by policy focus on sugar. Critics have urged relevant authorities to reassess national agricultural priorities, arguing that sound judgment is needed to determine whether cotton or sugar deserves greater attention in the country’s long-term economic interest.

Copyright Business Recorder, 2026