Weekly Cotton Review: Prices turn higher as rains lift market sentiment

KARACHI: Cotton prices across Pakistan have turned upward after a period of relative stability, as fresh rainfall lifts market sentiment in key growing regions. In Punjab, cotton rates rose by five hundred rupees per maund following recent showers, while rainfall has also begun in cotton-producing districts of Sindh. Agricultural experts say the rains, if moderate, will prove beneficial for the standing crop and could help boost this season’s overall output.

However, industry leaders warn that cotton production faces a fresh threat from an unexpected quarter. Following the setting up of a large sugar mill in Rahim Yar Khan, plans for another such facility in Ghotki have sparked fears that some of the country’s most productive cotton belts, including Ghotki, Mirpur Mathelo and Pano Aqil, could suffer serious damage. Ehsan-ul-Haq, Chairman of the Cotton Ginners Forum, criticized the trend, saying the country was effectively promoting a crop that worked against its own national interest. He also pointed to the import of under-invoiced fabrics and cotton yarn from China, saying it was inflicting serious damage on the domestic textile industry and demanded urgent government intervention.

In a related development, the Sindh High Court has granted temporary relief to the Karachi Cotton Association, permitting it to continue operating from its premises. Despite the order, association officials say they have yet to be allowed back into the building, leaving members uneasy about the outcome of the dispute.

On a brighter note, Pakistani textile products drew strong international interest at recent global exhibitions. The events brought together four hundred twenty-five exhibitors from twenty countries, including Pakistan, with the Pakistani pavilion emerging as a major highlight and attracting considerable attention from foreign buyers.

Cotton Market Sees Bullish Trend Amid Cautious Trading

The local cotton market recorded an overall bullish trend last week after a period of price stability. Textile mills continued to purchase cotton cautiously, while ginners based their selling prices on the rates and quality of seed cotton (phutti). Trading volume remained inconsistent throughout the week, fluctuating between sluggish and improved activity. Rainfall in various cotton-growing regions prompted ginners to adopt a more careful approach, although mills in need of stock continued to show buying interest.

International cotton prices also witnessed considerable volatility during the week. Mixed developments surrounding tensions between the United States, Iran, and Israel further contributed to fluctuations in the global market, as both positive and negative news impacted investor sentiment.

Meanwhile, concerns are growing over the establishment of new sugar mills in key cotton-producing areas, a development that is adversely affecting cotton cultivation. Despite the seriousness of the issue, the government has shown little resistance to this trend. Analysts note that cotton holds far greater economic significance for the country than sugar, since surplus sugar production is often exported at low international prices, while the country is forced to spend valuable foreign exchange reserves on cotton imports. Observers have questioned why this straightforward economic reality continues to escape policymakers.

Districts such as Ghotki, Mirpur Mathelo, and Pano Aqil, long regarded as some of the country’s most productive cotton belts, are now at risk, as the expansion of sugar mills in these regions threatens to inflict serious damage on local cotton production.

Cotton prices remained largely stable across Pakistan’s major cotton-producing provinces, according to the latest market report.

In Sindh, cotton was trading between Rs18,100 and Rs18,400 per maund, while seed cotton (phutti) fetched Rs8,200 to Rs8,800 per 40 kg. In Punjab, cotton prices ranged from Rs18,600 to Rs19,200 per maund, with phutti selling between Rs8,300 and Rs9,200 per 40 kg. Meanwhile, in Balochistan, cotton prices stood at Rs18,200 to Rs18,400 per maund, and phutti was priced between Rs8,700 and Rs9,400 per 40 kg.

The Spot Rate Committee of the Karachi Cotton Association maintained the spot rate at Rs18,200 per maund, keeping it unchanged from the previous session.

Speaking on international market trends, Karachi Cotton Brokers Forum Chairman Naseem Usman said the global cotton market showed a mixed pattern, with New York cotton futures trading between 79 and 81 US cents per pound.

According to the US Department of Agriculture’s (USDA) weekly export and sales report, 29,700 bales were sold for the 2025-26 marketing year. Vietnam emerged as the top buyer with purchases of 14,200 bales, followed by Pakistan in second place with 5,300 bales, and India in third place with 3,400 bales.

For the 2026-27 marketing year, total sales reached 352,400 bales. Vietnam again led the buying with 245,500 bales, followed by India with 42,200 bales and Pakistan with 18,400 bales, ranking second and third, respectively.

On the export front, total shipments amounted to 233,800 bales. Vietnam remained the largest importer, receiving 78,600 bales, followed by Pakistan with 49,400 bales and Indonesia with 18,000 bales, securing the second and third positions respectively.

Pakistan’s new sugar mill in Ghotki signals sugarcane expansion in cotton zones. But cane uses far more water, weakens export supply, and pushes farmers away from cotton. Cotton first is the needed policy shift.

The start of trial operations by another sugar factory in Ghotki should not be read as a routine industrial development. It is a warning sign. The plant has already processed around 92,000 tonnes of sugarcane and takes the number of sugar mills in a district once known for cotton from five to six.

Pakistan is expanding the wrong crop. Sugarcane may offer the farmer an assured buyer and timely cash flow, but it is a poor national bargain. It locks land and water into a long-duration crop in a country that is already water-stressed, while displacing cotton, the crop that feeds Pakistan’s most important export industry.

The arithmetic is not complicated. According to figures cited by Sindh Agriculture University Tandojam Vice Chancellor Dr Altaf Ali Siyal, sugarcane requires 66.9 inches of water per acre. Cotton requires 31.5 inches. Wheat requires 16.7 inches. In other words, one acre of sugarcane consumes more water than cotton and wheat combined.

This is not just an agronomic problem. It is an economic misallocation. PIDE research has found that sugarcane consumes about 3.5 times more water than cotton, while one litre of water used in cotton production generates about four times higher monetary benefit at both the farm-gate and processing stages.

Cotton, unlike sugarcane, sits at the centre of an export value chain. Profit has previously reported that textiles account for between 50 and 60 percent of Pakistan’s export earnings, while the country’s cotton output has fallen sharply from 14 million bales in 2005 to around 5 million bales last year. This decline has forced mills to rely on imported cotton, adding pressure to the import bill and weakening the domestic farm-to-factory chain.

Sugarcane’s defenders argue that farmers choose it because cotton has become risky. That is true, but it is not an argument for further cane expansion. It is an indictment of cotton policy. Weak seed research, pest vulnerability, unstable prices, poor extension services and uncertain procurement have pushed farmers towards crops that offer better short-term security.

The policy response should be clear. No more public encouragement, regulatory softness or infrastructure bias for sugarcane expansion in cotton zones. Water pricing must reflect scarcity. Crop zoning must be enforced. Cotton areas should receive priority in canal water, seed development, pest control, crop insurance, financing and price support.

Pakistan cannot keep subsidising a crop that exports water and imports inflation. The country needs foreign exchange, rural employment and industrial depth. That means cotton first, not cane.

Cotton industry is facing mounting pressure amid allegations that large quantities of fabric imported from China under the Export Facilitation Scheme (EFS) are being diverted to the open market after under-invoicing while widespread rains and looming floods threaten to inflict fresh damage on the standing cotton crop.

Cotton Ginners Forum Chairman Ihsanul Haq warned on Sunday that the industry, already grappling with declining cotton production, soaring energy costs, heavy taxation and expensive bank financing, could face further deterioration if alleged loopholes in the EFS were not addressed. He claimed that after reports of under-invoiced cotton yarn imports from China being sold in the local market, similar concerns had now emerged regarding fabric imports under the same mechanism.

Haq urged the federal government to carry out a strict audit of all imports made under the EFS to prevent further damage to the domestic textile and cotton sectors.

The All Pakistan Textile Mills Association (Aptma) had earlier provided the Federal Board of Revenue (FBR) with data regarding millions of kilograms of yarn allegedly imported through under-invoicing under the scheme. He said the domestic cotton industry had been in decline for several years due to shrinking cotton production and quality, high taxes, record electricity and gas tariffs, and costly bank borrowing. As a result, export-oriented textile mills had become increasingly dependent on imported cotton.

East Coast’s largest textile and apparel sourcing exhibition concluded successfully at the Javits Center after a three-day run from July 29 to 31.

The event, comprising Texworld New York, Apparel Sourcing New York, and Home Textiles Sourcing New York, is widely regarded as the region’s premier gathering for the textile and apparel trade. This year’s edition drew more than 425 exhibitors from 20 countries, offering a key platform for sourcing, sustainability, and global business networking.

The 2026 edition held special significance as it marked the 20th anniversary of Texworld New York, celebrating two decades of connecting the international textile industry and promoting cross-border collaboration.

Pakistan was represented by six companies, which showcased their strengths in fashion, apparel, and home textiles. Their presence reinforced the country’s standing as a dependable sourcing destination, known for quality manufacturing, sustainable practices, competitive capabilities, and a strong export track record.

The participating firms, Pak Champions, A One International, Aam Trade Corporation, MRI Group, Nazir Imports, and Rocky Imports, displayed their products at the Pakistan Pavilion, set up under the Trade Development Authority of Pakistan (TDAP).

Pakistan’s Ambassador to the United States, Rizwan Saeed Sheikh, visited the pavilion along with Pakistan’s Consul General in New York and the Trade and Investment Counsellor. During the visit, the ambassador met with exhibitors and praised their efforts in effectively representing Pakistan’s textile sector on the international stage.

Industry observers said the strong turnout from Pakistani companies reflected the country’s expanding footprint in the global textile and apparel market, as well as its ongoing commitment to supplying high-quality products to international buyers.

Copyright Business Recorder, 2026