KARACHI: The downward trend in cotton prices continued in the domestic market, while trading activity remained satisfactory. However, the deteriorating quality of locally produced cotton has emerged as a major concern for textile spinners, who are already struggling with rising production costs and uncertainty over the availability of quality raw material.
According to cotton market analysts, New York cotton prices have also declined, but importing cotton has become increasingly difficult due to escalating tensions between Iran, the United States and other countries in the region. A substantial increase in international freight charges has further complicated import arrangements and raised the cost of imported cotton.
The textile sector and other industries are already facing serious challenges due to high interest rates and expensive energy. Instead of providing relief to industrial consumers, the cost of electricity is being increased further. An increase of Rs2.56 per unit in electricity tariffs is expected to generate an additional Rs33 billion from consumers, reportedly. Meanwhile, indications suggest that energy prices could increase two to three times during the first three months of the coming year.
The Power Division has also warned that December, January and February could prove particularly difficult for electricity consumers, raising concerns about the future cost of doing business and the competitiveness of export-oriented industries.
The deteriorating quality of domestic cotton has further aggravated the problems of textile spinners. Industry stakeholders believe that the declining quality of raw cotton could affect yarn production and increase manufacturing costs, particularly at a time when importing better-quality cotton has become difficult because of regional tensions and higher freight charges.
Meanwhile, experts have stressed that the revival of Pakistan’s cotton sector requires collective efforts and shared responsibility among the government, farmers, ginners and textile manufacturers. Improving cottonseed quality, increasing per-acre yields and ensuring the availability of high-quality raw material are considered essential for strengthening the country’s cotton and textile industries.
As part of its cotton sector revival strategy, Pakistan has planned a fast-track approval mechanism for imported cotton seeds. However, the existing approval process reportedly takes around 12 months, causing delays in the introduction of improved seed varieties. Industry stakeholders believe that the process needs to be streamlined to ensure the timely availability of quality seeds and improve domestic cotton production.
Separately, the Federal Board of Revenue (FBR) has fixed a deadline for the installation of surveillance cameras at textile units. The measure is aimed at strengthening monitoring and ensuring compliance with the prescribed requirements by industrial establishments.
In another development, India has extended its duty-free cotton import facility by two months to moderate domestic prices and ensures an adequate supply of raw material for its textile industry. The decision is intended to maintain price stability and facilitate cotton imports for domestic manufacturers.
Cotton market observers believe that Pakistan’s cotton and textile sectors require a coordinated strategy to address the challenges facing the industry. They emphasised that ensuring the availability of quality seeds, improving domestic cotton production, controlling energy costs and maintaining consistency in government policies are essential for the sustainable revival of the cotton sector and strengthening the country’s textile exports.
Cotton prices in the local market continued to fall during the past week, pressured by a persistent drop in New York futures and deterioration in the quality of domestically produced cotton. Poor quality has further eroded prices, while textile spinners remain cautious about buying raw cotton.
Market sources blamed the quality decline on blending by some ginners, who are mixing different grades to clear their stocks rather than improving quality. Others are trying to produce better cotton but are struggling with the shorter staple length of seed cotton (phutti).
Bearish sentiment dominated the market overall. Falling cotton yarn prices and a severe liquidity crunch were also cited as key reasons for the continued weakness.
The textile sector is already under strain. Industrialists have been calling for a cut in the policy interest rate to ease financial pressure, but the State Bank of Pakistan instead raised it by 50 basis points to 12 per cent.
Industry players are also grappling with high energy costs, while heavy imports of cheaper fabric and yarn from China are hurting domestic manufacturers. Industry representatives further see the Federal Board of Revenue (FBR) as an additional obstacle to business activity.
In Sindh and Punjab, cotton traded between Rs16,000 and Rs18,000 per maund, depending on quality and payment terms, while Balochi cotton fetched Rs18,700 to Rs19,000 per maund. Conditions in Balochistan were similar.
Seed cotton (phutti) prices in Sindh, Punjab and Balochistan ranged from Rs7,000 to Rs9,000 per 40 kg, depending on quality.
The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 2,00 per maund and closed it at Rs Rs17,800 per maund.
Naseem Usman, chairman of the Karachi Cotton Brokers Forum, said bearish conditions were also prevailing in the international market, with New York cotton futures trading between 79 and 84 US cents per pound.
According to the US Department of Agriculture’s (USDA) weekly export sales report, 216,500 bales were sold for the 2026-27 season. China was the top buyer at 52,100 bales, followed by Türkiye (40,800) and Vietnam (35,000).
For the 2027-28 season, sales totalled 38,300 bales, led by Indonesia (17,000), Honduras (8,000) and China (5,300).
Exports during the reporting period came to 160,800 bales. Vietnam was the main destination, taking 65,200 bales, followed by Pakistan (26,600) and Türkiye (13,900).
The Federal Board of Revenue (FBR) on Monday directed all textile spinning units to install video surveillance cameras by November 15, 2026 for monitoring of production, cotton bales and processing of natural, man-made and blended fibres in loose including cotton, polyester, viscose, wool and acrylic.
In this regard, the FBR has issued a Sales Tax General Order No 30 of 2026 - IR Operations on Monday.
The FBR has issued additional requirements for the textile spinning units for electronic monitoring of production by installation of video surveillance cameras on textile processing machinery to monitor the processing of natural, man-made and blended fibre in loose, opened or other non-bale forms, including cotton, polyester viscose, wool and acrylic.
Consumers could face a difficult winter, with sources in the Power Division warning that December, January and February may bring particularly expensive electricity. The Fuel Price Adjustment (FPA) could rise two to three times during these months, they said, as higher prices for LNG, coal and other fuels push power generation costs to exceptionally high levels.
Reviving Pakistan’s cotton sector will take more than improved seeds and modern technology, according to a proposed framework. It calls for an integrated economic approach in which every stakeholder plays a role suited to its resources, expertise and commercial interests.
One proposal is to set aside Rs15 billion to Rs20 billion a year for a comprehensive cotton revival programme. It would cover government-led research, seed development, modern production technologies, protection for growers and measures to keep market prices stable.
A minimum support price of Rs10,000 per 40 kilogrammes of seed cotton has also been floated. However, the price should reflect production costs, market conditions and the government’s financial capacity.
The proposal also suggests strengthening the Trading Corporation of Pakistan (TCP) and making its role more effective, as a way to curb sharp swings in market prices.
Pakistan’s cotton revival strategy should focus on improving farmers’ profitability, reducing production costs and strengthening the competitiveness of cotton against alternative crops, as the country’s textile industry, ginners, agricultural input suppliers, research institutions and growers need to work together to revive the declining cotton sector.
The All Pakistan Textile Mills Association (APTMA), textile mills and ginners should take concrete measures to promote contract farming in Punjab and Sindh through transparent agreements covering the provision of quality agricultural inputs, including seeds, fertilisers and pesticides, technical assistance, reasonable prices, guaranteed procurement of produce and timely payments.
Similarly, companies manufacturing seeds, fertilisers and pesticides should voluntarily allocate 5 to 7 per cent of their annual net profits to support farmers through special discounts on agricultural inputs and the provision of technical services, helping reduce cultivation costs.
Research institutions, including the Pakistan Central Cotton Committee (PCCC), Cotton Research Institute (CRI) Multan and CRI Sakrand, also require sustained government investment to develop climate-resilient and pest-resistant cotton varieties, improve fibre quality and introduce modern, cost-effective technologies. Private research institutions can contribute through innovation, investment and scientific collaboration.
Agricultural extension services should provide region-specific recommendations in line with local requirements and climatic conditions, while their performance should be evaluated on the basis of improvements in per-acre yields and farmers’ profitability.
Cotton growers, meanwhile, should adopt certified seeds, Integrated Pest Management (IPM), efficient water utilisation and improved agricultural practices. Farmers’ organisations can also facilitate access to modern technologies and markets.
The proposed approach emphasises shared responsibility, with the government providing a supportive policy environment and the private sector, research institutions, agricultural input suppliers and farmers contributing through investment and practical measures.
The success of the strategy should be assessed against its ability to reduce production costs, increase net profits per acre and improve cotton’s competitiveness against alternative crops.
Meanwhile, Federal Minister for National Food Security and Research Rana Tanveer Hussain has directed the relevant authorities to examine a proposed fast-track approval mechanism for imported cotton seeds, aimed at reducing the approval period from approximately seven years under the existing procedure to 12 to 18 months.
According to an official statement issued on Thursday following a meeting chaired by the minister to review the cotton revival strategy, the proposal has the support of stakeholders in the cotton sector but would not compromise mandatory scientific testing or biosecurity and biosafety standards.
The meeting reviewed the continued decline in cotton cultivation, particularly in Punjab, where falling yields, rising production costs and declining profitability have encouraged farmers to switch to sugarcane, maize and other competing crops.
Cotton Leaf Curl Virus, pest attacks, climate change, poor-quality seeds and inadequate mechanisation were identified as major challenges affecting the sector.
The meeting also discussed a three-pronged strategy focusing on strengthening locally developed cotton seeds, facilitating the import of improved varieties and introducing a fast-track approval mechanism.
A three-member committee comprising representatives of the Pakistan Agricultural Research Council (PARC), National Seed Development and Regulatory Authority (NSDRA) and Pakistan Central Cotton Committee (PCCC) will be constituted under the leadership of PARC to facilitate the acquisition of foreign cotton germplasm.
The minister also directed the Department of Plant Protection to expedite pending pest risk analyses and the issuance of controlled import permits. China has submitted its technical dossier along with additional information, while engagement with Türkiye, Syria, Kenya, the United States, Mexico, Kyrgyzstan and Australia will depend on their respective responses.
Regarding crop zoning, the NSDRA was directed to accelerate the processing of promising cotton varieties and ensure the availability of basic seed. Approved varieties are to be evaluated according to their performance in specific agro-climatic zones rather than through a uniform national standard.
Meanwhile, India’s decision to extend its customs duty exemption on cotton imports until December 31 has raised concerns about the growing competitive pressure on Pakistan’s textile industry.
India had initially abolished customs duties on cotton imports from June 1 to October 31 to facilitate its textile industry. The exemption period has now been extended by another two months, allowing Indian textile mills to import cotton from international markets without customs duties until December 31.
India has also taken several measures to protect and strengthen its textile industry following the February 28 attacks on Iran by the United States and Israel. The sector is a major source of employment, providing jobs to millions of people, besides generating valuable foreign exchange through exports.
As the world’s second-largest cotton producer after China, India’s decision to facilitate duty-free cotton imports reflects its efforts to maintain the competitiveness of its textile industry through supportive government policies.
In contrast, Pakistan’s textile industry continues to face serious financial and operational challenges, particularly due to the withholding of billions of rupees in tax refunds. The delayed payments have created liquidity problems for textile exporters, making it difficult for them to meet their payment obligations to local cotton growers.
The competitive challenges facing Pakistan’s textile sector could intensify further with the expected implementation of the Free Trade Agreement (FTA) between India and the European Union by early 2027.
The proposed agreement could significantly alter the competitive position of Pakistani textile exports in the European market, as Indian products are expected to gain preferential access with little or no customs duties. This could weaken Pakistan’s existing competitive advantage under the GSP Plus arrangement.
With Pakistan’s textile production costs already higher than those of India, industry stakeholders fear that the proposed trade arrangement could put additional pressure on Pakistani exporters and their access to the European market.
In view of these developments, textile associations have been urged to immediately approach the government and seek urgent policy interventions to protect the country’s textile exports, ensure timely payment of outstanding refunds and improve the competitiveness of the domestic industry.
Industry stakeholders believe that Pakistan needs to adopt a comprehensive and forward-looking strategy to support its cotton growers and textile manufacturers, particularly at a time when its major regional competitor is taking concrete steps to strengthen its textile industry.
Copyright Business Recorder, 2026
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