Weekly Cotton Review: Bearish trend persists amid thin trading volumes
KARACHI: Pakistan’s cotton market witnessed a broadly bearish trend as trading volumes remained significantly thin. Cotton prices recorded a notable decline, while demand for cloth and cotton yarn also fell sharply, keeping prices of these commodities under sustained pressure throughout the session.
The country’s textile industry, which was already grappling with severe financial distress, has now been dealt another blow in the form of a newly imposed super tax by the government, further deepening the crisis for industrialists across the sector. Officials of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) have stated that operating industries under the current circumstances has become not merely difficult but increasingly impossible. They have urged the government to immediately declare an industrial emergency in the country, warning that without urgent intervention, the consequences for the broader economy could be severe.
The plight of farmers is no less alarming. Khalid Khokhar, Chairman of Kisan Ittehad, spoke in a deeply distressed tone in a public statement, saying that growers of cotton and all other crops are effectively on a ventilator, adding that even the cost of seeds is not being recovered after selling the harvest. He appealed to the government to take immediate and concrete measures to ensure the survival of the farming community, which he described as being pushed to the brink of collapse.
Meanwhile, the All Pakistan Textile Mills Association (APTMA) has sounded a serious warning that textile exports face grave threats, and has called upon the government to urgently pursue diplomatic efforts to secure special trade concessions from the United States so that Pakistani products can maintain their competitive edge in American markets.
On a separate but significant legal development, an important breakthrough has emerged in the case concerning the de-sealing of the Cotton Exchange building. The case registered against the Karachi Municipal Corporation (KMC) has been formally converted into an inquiry, the Federal Investigation Agency (FIA) has submitted its report before the court, and a new date has been fixed for the next hearing. The court, however, has made it clear that all interim orders issued previously will remain in force until further proceedings.
The local cotton market experienced a bearish trend throughout the past week, largely driven by declining international cotton prices. Buyers have been conspicuously absent from the market, a situation attributed primarily to falling demand for cotton yarn and fabric. Ironically, consumer spending on textiles traditionally picks up ahead of Ramadan, but persistent inflation and an ongoing financial crisis have left markets largely inactive, with households prioritizing food and basic necessities over clothing and other discretionary purchases.
The situation is equally grim in Faisalabad, Pakistan’s largest yarn market, where buyers have become a rare sight. Reports emerging from the city paint a picture of severe financial distress, with business activity reduced to a bare minimum.
The broader textile sector across the country is in a state of deep crisis. According to APTMA Chairman Kamran Arshad, approximately 150 textile units have already shut down, with more on the verge of closure. The primary causes cited include soaring energy costs, high interest rates, an excessive tax burden, and billions of rupees in stuck refunds that have rendered Pakistani manufacturers unable to compete with regional rivals. As if these challenges were not enough, the imposition of a super tax has added yet another financial burden to an industry already struggling to survive.
Officials of the FPCCI have stated that running industries under current conditions has become not just difficult but increasingly impossible. They have formally demanded the declaration of an industrial emergency, pointing out the contradiction in the government’s efforts to attract foreign investment while domestic industries are shutting down one after another. Several multinational companies have already ceased operations in Pakistan or relocated abroad, and local industrialists are also moving their businesses to other countries, driving unemployment and economic inactivity to alarming levels.
Meanwhile, Kisan Ittehad Chairman Khalid Khokhar expressed his anguish in a strongly worded statement, declaring that cotton and all other crop farmers are effectively on a ventilator, with returns from harvests failing to even cover the cost of seeds.
In a separate legal development, a case registered against the de-sealing of the Cotton Exchange building and against the KMC has been converted into a formal inquiry. The FIA has submitted its report to the court, a new hearing date has been set for further proceedings, and interim orders issued by the court will remain in force in the interim.
In the provinces of Sindh and Punjab, cotton prices are currently ranging between Rs. 15,000 and Rs 16,200 per maund, depending on quality and payment conditions. It is worth noting that the Daily Cotton Spot Rate has remained suspended since December 12, 2025.
Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, stated that international cotton prices are experiencing an overall bearish trend. New York cotton futures were recorded between 62 and 68 US cents per pound during the period under review.
According to the USDA Weekly Export and Sales Report, a total of 231,000 bales were sold for the marketing year 2025–26. Vietnam led all buyers with the purchase of 104,000 bales, followed by Turkey in second place with 45,900 bales. Pakistan ranked third, having purchased 32,900 bales.
For the 2026–27 marketing year, total sales stood at 50,900 bales.
An unknown destination topped the list with 22,000 bales, followed by Indonesia with 20,300 bales and Mexico with 8,500 bales in third place.
On the export side, shipments totalled 188,600 bales. Vietnam remained the leading importer with 69,700 bales received, while Pakistan followed in second place with 32,900 bales. Bangladesh ranked third with imports of 20,700 bales.
Meanwhile, the All Pakistan Textile Mills Association (APTMA) has raised serious concerns over the growing threat to Pakistan’s textile exports, warning that major competitor countries have already secured improved market access to the United States through new trade agreements. APTMA has urged the government to actively pursue and obtain special trade concessions from the United States to safeguard Pakistan’s position in the American market.
One of Pakistan’s leading industrial bodies, the All Pakistan Textile Mills Association (APTMA), on Wednesday urged the government to immediately initiate negotiations with the United States in order to secure preferential market access for Pakistan’s textile exports.
In a letter addressed to Federal Minister for Commerce Jam Kamal Khan, APTMA stated that the correspondence was being written in the context of recent trade developments that are significantly affecting Pakistan’s export competitiveness.
The association highlighted that major rival countries have already secured improved market access to the United States through new trade agreements. It pointed out that India has finalized arrangements with the US for a tariff rate of 18 percent, while Pakistan continues to face a rate of approximately 19 percent. In addition, the European Union and India have concluded a Free Trade Agreement (FTA), further widening the competitive gap.
APTMA also noted that Bangladesh has recently secured zero-tariff access to the American market for garments and apparel manufactured from US cotton, a development it described as posing a serious and immediate threat to Pakistan’s textile and clothing exports.
The association emphasised that Pakistan’s textile sector is already under severe pressure due to high energy and raw material costs, the highest interest rates in the region, heavy taxation, and an overall challenging business environment. It warned that improved market access enjoyed by competing nations, combined with their lower production costs, puts Pakistan’s export share in its largest market — the United States — at further risk of erosion.
APTMA proposed that the Ministry of Commerce seek tariff concessions from Washington on Pakistani textile and apparel exports made from US cotton, offering in return an increase in imports of American cotton. The association added that it had already reached out to the US Embassy in this regard, presenting the proposal for preferential market access.
Urging swift government action in view of the rapidly shifting competitive landscape, APTMA respectfully requested that the Government of Pakistan engage with American authorities to secure duty-free access for Pakistani textile and apparel products manufactured from US cotton.
The Federal Investigation Agency (FIA) informed the Sindh High Court on Friday that it has unsealed the Cotton Exchange building and converted the registered case against Karachi Metropolitan Corporation (KMC) officials into a preliminary inquiry, prompting the court to defer its reserved judgment and schedule a fresh hearing.
The two-member bench, headed by Justice Adnan Iqbal Chaudhry of the Sindh High Court, had already reserved its verdict in the matter but refrained from announcing it following a significant development brought to its attention before the pronouncement. Instead, the court fixed March 4 as the next date of hearing, while directing that all interim orders already in place would continue to remain in effect. Notices have been issued to all parties concerned for the upcoming proceedings.
According to the details of the case, the Karachi Cotton Exchange Association had filed a petition stating that in December 2025, the FIA conducted a raid on the Cotton Exchange building, evacuated all occupants, and subsequently sealed the premises on the grounds that it was classified as abandoned property.
In February 2026, the High Court had directed the FIA not to take any coercive action against KMC, the Karachi Cotton Exchange, or any other affected parties until further orders, following which the bench reserved its judgment.
However, before the verdict could be formally announced, the FIA submitted a written communication to the court informing it that the case registered in connection with the building had been converted into an inquiry. The agency further stated that proceedings would henceforth be conducted in accordance with the applicable rules and regulations, and that any formal case would only be registered upon approval from the competent authority.
In its observations, the court noted that while the judgment had already been reserved, an important development had emerged prior to its announcement, necessitating that the matter be relisted for hearing on March 4 so that the petitioners could be heard further. The court also made clear that all interim orders issued earlier would remain operative throughout this period.
Copyright Business Recorder, 2026