Weekly Cotton Review: Prices fall sharply as production rises
KARACHI: Local cotton prices fell sharply on the domestic market, tracking a significant decline in New York cotton futures. Rates dropped by between Rs1,000 and Rs1,200 per maund. Meanwhile, cotton production has risen by 19.17 percent, with Sindh producing 1.528 million bales and Punjab 861,000 bales. A relatively higher supply of phutti (seed cotton) has also pushed its prices down.
Trade circles say the market situation has now reversed. Ginners have begun settling thousands of pending bale contracts, while several textile mills are showing reluctance to honour deals they signed at higher prices.
Separately, the All Pakistan Textile Mills Association (APTMA) held detailed consultations with the European Union’s ambassador on a strategy to secure an extension of the GSP Plus status. In Hyderabad, a delegation of the Pakistan Cotton Ginners Association (PCGA) met Chief Commissioner Inland Revenue Sajjad Akbar Khan at the Regional Tax Office.
APTMA Chairman Kamran Arshad said the textile industry could be revived if the burden of electricity and gas tariffs, interest rates and taxes were reduced. Quoting Bhagat Singh, he said that Delhi was hard of hearing, and added that the association believes the present government is hard of hearing as well.
Meanwhile, the affected parties of the Karachi Cotton Exchange (KCE) building have alleged that, despite clear Sindh High Court directives to de-seal the building, the Evacuee Trust Property Board (ETPB) has illegally occupied it with the help of the Federal Investigation Agency (FIA). They say the building’s historic name has also been replaced with the FIA’s signage, even though the question of who actually owns the building has yet to be decided.
Cotton prices in the local market fell sharply last week, dropping by Rs1,000 to Rs1,200 per maund, as ginners engaged in panic selling. One reason for the decline is a significant fall in New York cotton futures, which has led major textile mill groups to show greater interest in imported cotton. A considerable quantity of import contracts has been signed over the past two weeks. Meanwhile, with prices lower, ginners have begun releasing deliveries they had been holding back. As a result, mills’ purchases have declined, and deals made earlier are being sold off in larger volumes.
Reports are also coming in from cotton fields of a significant mealy bug and whitefly attack on the crop.
Owing to the Federal Board of Revenue’s (FBR) strict measures, unregistered cotton sales have begun to dwindle, and the volume of registered cotton is expected to rise. Meanwhile, the mixing of waste into cotton in Sindh has become almost negligible.
Rising energy prices have increased the cost of production across industries, and the textile sector is, naturally, among those affected.
In Sindh, cotton traded at Rs18,100 to Rs18,400 per maund, while seed cotton (phutti) sold at Rs8,000 to Rs8,600 per 40 kilograms.
In Punjab, cotton was priced at Rs18,500 to Rs18,700 per maund, while seed cotton sold at Rs8,500 to Rs8,800 per 40 kilograms.
In Balochistan, cotton traded at Rs18,200 to Rs18,300 per maund, while seed cotton sold at Rs8,600 to Rs9,000 per 40 kilograms.
The Spot Rate Committee of the Karachi Cotton Association cut the spot rate by Rs1,000 per maund and closed it at Rs18,400 per maund.
Karachi Cotton Brokers Forum Chairman Naseem Usman said that cotton prices in New York ranged between 81 and 85 US cents per pound. According to the weekly export sales report from the United States Department of Agriculture (USDA), 71,200 bales were sold for the 2026-27 marketing year. Vietnam topped the list of buyers with 28,200 bales, followed by Guatemala with 14,000 bales, while Pakistan ranked third with 7,500 bales.
For the 2027-28 marketing year, purchases totalled 6,200 bales, of which 5,600 bales were bought by Guatemala.
Exports for the week amounted to 142,100 bales. Vietnam led the importers with 44,600 bales, Pakistan came second with 24,700 bales, and India ranked third with 18,000 bales.
According to the Pakistan Cotton Ginners Association (PCGA) report released today on the cotton situation up to September 15, 2026, total cotton arrivals in the country reached 2,388,682 bales, 19.17 percent higher than the 2,004,384 bales recorded during the corresponding period last year. Cotton arrivals in Punjab stood at 860,942 bales, up 24.73 percent from 690,254 bales last year, while Sindh recorded arrivals of 1,527,740 bales, 16.25 percent higher than the 1,314,130 bales recorded during the same period last year.
Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute, Multan, said that the cotton arrival figures indicated a better situation compared with last year during the early part of the season. However, he said the crop had now entered a critical stage, with pink bollworm, rainfall, timely picking and lint quality likely to play an important role in determining final production.
He said Sanghar recorded the highest cotton arrivals in Sindh at 888,607 bales, while Dadu registered a 150 percent increase over last year. Badin recorded arrivals of 3,292 bales, whereas Ghotki witnessed a decline of 34.88 percent compared with the previous year. In Punjab, Bahawalnagar remained the leading district with 166,400 bales, while Bhakkar and Kasur recorded increases of 3,100 percent and 1,200 percent, respectively.
According to the PCGA report, 205 ginning factories in Punjab and 207 in Sindh, making a total of 412 factories, were operational as of September 15. Punjab had 40,084 bales and Sindh 39,206 bales in unsold stocks, while 2,800 bales and 90,000 bales were sold to exporters and traders, respectively. The total unsold cotton stock across Pakistan was reported at 260,789 bales.
Sajid Mahmood said the overall condition of the crop remained encouraging in major cotton-growing areas of Sindh, including Sanghar, Matiari, Tando Allahyar, Hyderabad, Mirpurkhas, Nawabshah and Naushahro Feroze. Moderate rainfall in some areas had not caused significant damage to the crop, he said, although heavy rainfall could still pose a risk. In Punjab, the crop also retained overall potential in the southern cotton belt, including Bahawalpur, Bahawalnagar, Dera Ghazi Khan, Multan, Vehari, Rahim Yar Khan, Muzaffargarh and Rajanpur.
He said rainfall and thunderstorm activity across several areas of Punjab and Sindh during September had once again highlighted the weather-related risks during the final stage of the crop. At present, the growing pressure of pink bollworm was the most significant concern. Reports of pink bollworm infestation had emerged from various cotton-growing areas of Punjab and Sindh, while the September field advisory issued by CCRI Multan had also stressed continuous monitoring and timely control measures.
According to Sajid Mahmood, whitefly, jassid, thrips and other sucking pests also remained important threats to cotton. However, he said the risk posed by pink bollworm was more prominent at the current stage. He stressed that monitoring the visible condition of the crop alone was not sufficient. The presence of pink bollworm inside bolls and the proportion of affected bolls also needed to be monitored continuously.
He said the next few weeks would be critical for determining final production in Sindh and southern Punjab. Pink bollworm pressure, moisture following rainfall, timely picking and potential impacts on lint quality were now the key factors. He added that cotton prices had also shown some improvement in recent days. At this stage, however, the primary focus should remain on protecting the remaining crop from pest and weather-related damage, ensuring timely picking.
Pakistan’s textile industry and the European Union have opened discussions on securing a renewal of the EU’s Generalised Scheme of Preferences Plus (GSP+) trade facility, with EU Ambassador Raimundas Karoblis stressing that progress on human rights, labour and environmental reforms would be crucial to retaining the scheme beyond its 2027 expiry.
The ambassador, accompanied by First Secretary Kert Ajamaa, Development Cooperation Manager Theis Munksgaard-Hansen and Senior Economist/ Trade Advisor Husnain A Iftakhar, met senior office-bearers of the All Pakistan Textile Mills Association (APTMA) at APTMA House on Friday.
APTMA Chairman Kamran Arshad, Chairman-elect Asad Shafi and other senior representatives received the EU delegation.
Ambassador Karoblis told the industry leaders that Pakistan would have to demonstrate concrete progress in implementing and legislating international conventions required for continued GSP+ eligibility. He urged the business community, particularly exporters, to accelerate reform efforts and engage with the government on concerns raised by the European Commission regarding human and labour rights, governance and environmental standards.
He also appreciated the textile sector’s efforts towards sustainability, saying such measures would be an important factor in the EU’s assessment of any application for renewal.
APTMA Chairman Kamran Arshad said the EU was Pakistan’s largest trading partner and that GSP+ had enabled the country to export 78 percent of its goods to the European market duty-free.
He said the facility had contributed to employment generation, investment and technological upgradation while supporting Pakistan’s efforts to achieve net-zero carbon emissions by 2050.
Arshad warned that any loss of GSP+ could severely affect exports, costing the country more than Rs1 trillion annually and potentially leading to mill closures and unemployment. He said the impact could also extend to the banking, real estate and transport sectors as textile companies accounted for more than 40 percent of outstanding bank loans.
He added that a disruption of the facility could also undermine progress on labour rights, anti-corruption measures and narcotics-control initiatives.
APTMA Chairman North Asad Shafi said the textile industry had invested billions of dollars in EU-sourced machinery under its expansion plans. He urged the ambassador to support efforts to fast-track a Pakistan-EU free trade agreement, similar to the India-EU FTA, as a safeguard against any possible lapse of GSP+.
Shafi also briefed the ambassador on APTMA’s compliance initiatives, including its advocacy for a proposed National Compliance Entity, and reaffirmed the association’s commitment to addressing compliance gaps ahead of Pakistan’s GSP+ reapplication.
An important and productive meeting was held at the Regional Tax Office (RTO) Hyderabad between Chief Commissioner Inland Revenue Sajjad Akbar Khan, senior RTO Hyderabad officials, Pakistan Cotton Ginners Association (PCGA) Vice Chairman Ramesh Kumar, former chairman Dr. Jasumal Talimani, and other representatives.
The meeting held detailed discussions on the recovery ratios, production levels, and prevailing market rates of the cotton ginning and oil milling sector for tax years 2025 to 2027. Both sides agreed that taxable production, recovery ratios, and market rates would be determined on the basis of reliable, verifiable, and evidence-based industry data. In this regard, the type and quality of cotton, moisture content, machinery, technology, and regional market conditions will also be taken into account.
The RTO Hyderabad reaffirmed its commitment to fair, transparent, and law-abiding tax administration through consultation, facilitation, and voluntary compliance. PCGA representatives, for their part, expressed their resolve to pay all legally due taxes and agreed to provide the relevant national and regional industry data.
The meeting concluded in an atmosphere of mutual cooperation, understanding, and goodwill. A follow-up meeting will be held on September 30, 2026, for further deliberation and a final decision on the matter.
Copyright Business Recorder, 2026