Weekly Cotton Review: Production rises but still falls short of industry needs

KARACHI: Pakistan’s cotton production has risen 6.88 per cent year on year to 4.743 million bales, but the crop still falls well short of the textile industry’s requirements, raising concerns over the supply of locally grown raw material.

Punjab contributed 1.999 million bales, while Sindh and Balochistan together produced 2.744 million bales.

The domestic cotton market remained largely stable this week, and prices in New York saw little movement. Local cotton traded between Rs15,500 and Rs18,500 per maund, depending on quality and payment terms. Market sources said these variations were hampering trade, with major textile groups showing more interest in imports than in buying locally.

The Federal Board of Revenue (FBR) has reportedly stepped up inspections and raids at ginning factories, alarming stakeholders who say the sector needs a supportive business environment and effective policy measures.

Market observers also expect energy prices to ease on the back of lower international oil prices, which could offer relief to energy-intensive industries, particularly textiles, which are struggling with high production costs.

Meanwhile, the Pakistan Agricultural Research Council (PARC) and the Central Cotton Research Institute (CCRI) are working on a joint strategy to strengthen cotton research and boost output, aiming for better coordination and research-based solutions.

Cotton sector representatives voiced serious concern over funding shortages at research institutions, saying they have hurt research, the development of improved varieties and efforts to raise per-acre yields. They warned that the decline in production cannot be reversed without adequate financial support.

In Faisalabad, known as the Manchester of Pakistan, the power loom industry is facing a severe crisis. Industry representatives cited rising production costs and operational difficulties that have created uncertainty for businesses and workers.

Separately, Finance and Revenue Minister Senator Muhammad Aurangzeb met a delegation of the Pakistan Textile Exporters Association (PTEA), where exporters raised concerns about the business environment and the sector’s competitiveness.

Industry stakeholders say high energy costs, taxation and other policy constraints must be addressed to restore competitiveness in global markets. They called for a comprehensive, consistent policy framework to support exports, attract investment and strengthen the domestic cotton value.

Pakistan’s cotton market remained largely stable over the past week, with New York futures also holding steady, but textile mills showed little appetite for local cotton amid deteriorating quality, putting downward pressure on domestic prices.

Major textile groups are increasingly turning to imported cotton, curbing demand for the local crop. Depending on quality and payment terms, cotton traded between Rs15,500 and Rs18,500 per maund in Sindh and Punjab, while phutti (seed cotton) sold for Rs7,000 to Rs9,600 per 40 kg.

The Spot Rate Committee of the Karachi Cotton Association (KCA) left its spot rate unchanged at Rs17,800 per maund.

Textile industry representatives voiced concern over a slowdown in exports of yarn and value-added products. Weak demand for locally made textiles in European and US markets has led major exporters to show greater interest in importing fabric from those regions.

Tensions between Iran and the US have raised sea freight rates and delayed deliveries, while exporters also complained of unnecessary payment delays, which they partly blamed on a severe liquidity crunch.

The cost of doing business continues to climb due to costly energy, high interest rates and multiple taxes. A growing number of power looms are shutting down, and several textile mills have been forced to cut production.

Industry representatives accused the government of prioritising the establishment of sugar mills in cotton-growing areas rather than taking steps to boost cotton output, contributing to a continuing decline in production. They also pointed to a lack of attention to the development and availability of quality cotton seed, and said institutions linked to the cotton trade were being neglected and downsized.

The ginning industry says it is shouldering excessive taxation, while the Federal Board of Revenue (FBR) has been conducting raids on ginning factories. Funding for the Pakistan Central Cotton Committee (PCCC) is also falling, and the unresolved Cotton Cess issue is hampering research and development.

Meanwhile, the historic Karachi Cotton Exchange Building, a symbol of the city’s cotton trade for 80 years, remains in what industry representatives call illegal occupation by the Federal Investigation Agency (FIA).

The Sindh High Court has yet to issue a final ruling on ownership. In its July 18 order, the court directed that tenants be given access to the building, but they have reportedly still not been allowed in. A decision has reportedly been made to let the FIA and other government departments operate from the premises. The cotton industry considers the arrangement unlawful until the ownership dispute is legally settled.

Naseem Usman, chairman of the Karachi Cotton Brokers Forum, said the global cotton market saw a mixed trend during the week, with New York futures trading between 78 and 83 US cents per pound.

According to the US Department of Agriculture’s (USDA) weekly export sales report, 277,500 bales were sold for the 2026-27 season. Vietnam led buyers with 200,500 bales, followed by Pakistan with 30,700 bales and Türkiye with 18,300 bales.

Total exports for the reporting period came to 137,800 bales. Vietnam was again the largest importer at 43,500 bales, followed by Mexico with 20,600 bales and Pakistan with 15,900 bales.

According to the latest report issued by the Pakistan Cotton Ginners Association (PCGA), total cotton arrivals at ginning factories across Pakistan reached 4,742,630 bales as of October 31, 2026. This represents an increase of 305,374 bales, or 6.88%, compared with 4,437,256 bales recorded during the corresponding period last year.

Punjab recorded cotton arrivals of 1,998,944 bales this season, compared with 1,909,080 bales during the same period last year. This reflects an increase of approximately 89,864 bales, or 4.71%. Combined arrivals from Sindh and Balochistan stood at 2,743,686 bales, up by 215,510 bales, or 8.52%, from 2,528,176 bales recorded last year. Balochistan alone registered 204,132 bales, representing a substantial increase of 35.41% over the 150,756 bales recorded during the corresponding period last year.

At the district level, Sanghar in Sindh remained the country’s leading cotton-producing district in terms of recorded arrivals, with 1,211,029 bales. It was followed by Sukkur with 318,429 bales, Naushahro Feroze with 256,700 bales and Khairpur with 239,500 bales. In Punjab, Bahawalnagar ranked first with 526,442 bales, followed by Bahawalpur with 365,199 bales and Dera Ghazi Khan with 283,156 bales.

A total of 465 ginning factories are currently operational across the country, including 229 in Punjab and 236 in Sindh. Of the total cotton arrivals, approximately 4,094,596 bales have been sold, with textile mills accounting for the major share of purchases. Unsold stocks stand at 648,034 bales, lower than the 693,818 bales recorded during the corresponding period last year. During the past 15 days, ginning factories received 661,365 bales, slightly higher than the arrivals recorded during the same period last year.

Overall, the report indicates an improvement in cotton arrivals compared with the previous season. The performance of Sindh and Balochistan has been particularly encouraging. The decline in unsold stocks also points towards relatively better market demand. However, national cotton production, arrivals at ginning factories and the actual income of farmers must be assessed as separate indicators rather than treated as interchangeable measures of recovery.

An assessment of the latest PCGA figures, alongside domestic market conditions, international trends and the requirements of the textile industry, presents a mixed picture. Cotton prices in the domestic market remain under pressure. The Karachi Cotton Association’s spot rate is hovering around Rs. 17,800 per maund, while cotton in Punjab and Sindh is available in the range of Rs. 16,000 to Rs. 18,000 per maund. Balochi cotton is fetching relatively higher prices.

In the international market, ICE cotton futures have been trading around 77 to 80 cents per pound, reflecting a relatively weak trend in recent weeks. The textile industry continues to exercise caution in its procurement decisions due to declining quality standards in locally produced cotton, staple-related issues and contamination, all of which affect yarn quality. Furthermore, the increase in the policy rate to 12% has raised financing costs, while several textile mills are facing liquidity constraints.

Pakistan’s textile industry requires approximately 14 to 15 million bales of cotton annually, whereas domestic production remains substantially below this level. Consequently, imports of 7 to 8 million bales appear inevitable during the current season, adding to the industry’s overall procurement costs. Although cotton arrivals have increased, farmers’ actual incomes have not strengthened proportionately. Price fluctuations, quality concerns and rising production costs, particularly for seed and fertilisers, have adversely affected growers’ net returns. As a result, many cotton farmers are earning lower profits than they had anticipated.

Meanwhile, the cotton crop across the country is approaching the final stage of its harvesting cycle. Most of the picking has been completed in the major cotton-growing areas of Punjab and Sindh, although the final picking round is still underway in some areas.

Following the final picking, agricultural experts at the Central Cotton Research Institute (CCRI), Multan, have recommended allowing sheep and goats to graze in cotton fields so that remaining partially opened and unopened bolls are consumed, helping destroy pink bollworm larvae inside them. Bolls that have not yet opened should also be picked and exposed to sunlight to facilitate their opening and recover additional seed cotton, while simultaneously helping to eliminate the pest larvae. Farmers have also been advised to take timely measures for off-season management of pink bollworm and the safe disposal of cotton stalks.

However, mature bolls are still present in some fields. At this stage, timely picking of the remaining crop, proper cleaning of seed cotton and protection against soil and other contaminants are essential to maintaining fibre quality. Where green bolls remain, the application of a urea solution, in accordance with crop conditions and local agricultural recommendations, may help facilitate boll opening and improve the recovery of the remaining seed cotton.

Meanwhile, the sowing season of wheat, the major Rabi crop, has commenced. Sowing is underway in rain-fed areas, while land preparation and cultivation in the irrigated areas of Punjab are expected to accelerate during November. Effective coordination between the final picking of cotton and timely wheat sowing is also essential to ensure that the productivity of both crops is not compromised.

The revival of Pakistan’s cotton sector requires a broader approach than simply increasing per-acre yields. Reducing production costs, improving fibre quality, strengthening marketing mechanisms and prioritising farmers’ net profitability must form the central pillars of the revival strategy. Sustainable recovery of the cotton sector will only be possible through an integrated approach that brings together agricultural research, modern production practices, market stability and the economic well-being of cotton growers.

The Pakistan Agricultural Research Council (PARC) and Central Cotton Research Institute (CCRI), Multan have agreed to pool their scientific laboratories, field facilities, and genetic resources to accelerate mechanical cotton harvesting, soil biochar research, and pink bollworm control.

The decision was finalised during a high-level research meeting at CCRI Multan, co-chaired by PARC Director General (Agricultural Linkages) Engr Irfan Ali and CCRI Multan Director Sabahat Hussain, alongside Pakistan Central Cotton Committee (PCCC) Secretary Dr Rao Wali Muhammad.

The meeting reviewed the PARC-PCCC MoU to preserve the genetic purity and diversity of conserved cotton germplasm for future high-yield variety breeding.

Advancing research on crop suitability for mechanical picking and exploring biochar applications to enhance soil productivity was also discussed. It was also decided to integrate joint research on integrated pest management (IPM) and biological controls targeting pink bollworm and whitefly.

The participants also agreed on jointly funding and executing research initiatives under PARC’s agricultural linkages programme utilising CCRI’s experimental fields and seed storage infrastructure.

Cotton arrivals at ginning factories rose 7 per cent year-on-year to 4.743 million bales by October 31, according to the latest figures from the Pakistan Cotton Ginners Association (PCGA), Cotton Ginners Forum Chairman Ehsan-ul-Haq said.

Punjab received 1.999 million bales, up 5pc, while Sindh recorded 2.744 million bales, an increase of 9pc over the same period last year.

Textile mills bought 3.997 million bales from ginners during the period, while exporters purchased 98,000 bales. Stocks of 648,000 bales remained available for sale at ginning factories.

Sanghar in Sindh led the country with arrivals of 1.211 million bales, followed by Bahawalnagar (526,000 bales), Bahawalpur (365,000), Sukkur (319,000), Dera Ghazi Khan (283,000) and Rahim Yar Khan (234,000).

The PCGA put Punjab’s arrivals at around 2.0 million bales by October 31. However, the Punjab government’s Crop Reporting Service reported 3.577 million bales as of October 29, a gap that is difficult to explain, the report noted.

Pakistan’s total cotton output for the 2025-26 season stood at 5.607 million bales. Despite a smaller area under cultivation than last year, production is expected to surpass 6 million bales, which Haq largely attributed to the Federal Board of Revenue’s (FBR) introduction of digital invoicing.

He said that until two years ago, the country regularly produced over one million bales in each fortnight of September and October. However, record sugarcane cultivation in cotton-growing areas has meant that target has not been met in a single fortnight over the past two years.

Haq said unusually high temperatures in most cotton-growing areas from July to the first week of November had badly affected seed germination. Fibre quality also suffered, with a marked decline in both length and strength.

As a result, textile millers have been forced to import larger volumes of high-quality cotton from international markets to meet their needs.

The national cotton crop has failed year after year, and the 2026 season is following the same pattern, with no end in sight. The prolonged decline in cotton production and the worsening quality of seed have a shared root cause: insufficient support for research institutions.

Until over a decade ago, Pakistan produced more than 14 million bales of cotton. Production now stands at roughly five million bales — about one-third of its peak. The impact is felt across the value chain: growers face losses season after season, while export-focused textile mills must import nearly $3 billion worth of cotton annually to keep their machinery operating.

Meanwhile, farmers report poor-quality seed, low germination rates, and varieties that fail to withstand pests, heat, and water stress. These are not separate crises. They are closely connected. When research lacks funding, staffing, and strong leadership, seed quality suffers. As seed quality declines, so does output. Lower production drives up imports, puts pressure on mills, and erodes farmers’ confidence in cotton.

Behind this decline sits an institution that was meant to prevent it. The Pakistan Central Cotton Committee (PCCC) is collapsing, and the government has not decided what to do about it. In laboratories across Multan and Sakrand, research continues against all odds. Experimental fields are still sown and improved varieties are still developed. But the apex body had no permanent head for over a decade and recruitment and promotions have been frozen for one and half decade. Only one of seven permanent director positions has been filled in the past eight years. Its remaining scientists have spent months working without regular salaries or pensions.

Yet the research pipeline has not entirely failed. CCRI Sakrand developed the CRIS-682 variety, which now covers an estimated 50-55 per cent of Sindh’s cotton acreage. In Punjab, CCRI Multan’s CYTO variety was cultivated across hundreds of thousands of acres this season. These results contradict the popular claim that PCCC produces nothing. The uncomfortable reality is that the institution keeps delivering despite being starved of funds.

The root of the crisis is the funding model. The PCCC depends on a cotton cess of Rs 50 per bale, a rate unchanged since 2012. Had the Economic Coordination Committee’s 2011 indexation formula been implemented, the cess would today stand at Rs 142.80 per bale. Over 60 textile mills challenged the levy in court after 2016. The PCCC won most cases, but unpaid dues have crossed Rs 2.5 billion. A July 2025 memorandum signed between the Ministry of National Food Security and Research, the PCCC and Aptma to clear Rs 2 billion in four instalments has not been implemented.

The PCCC is therefore trapped in administrative limbo between three options that nobody has pursued. The first is prolonged limbo — maintaining the status quo of underfunding and vacant posts. The second is a January 2025 Cabinet Committee on Rightsizing decision to merge the PCCC into the Pakistan Agricultural Research Council, which remains unexecuted. The third is handing operational control to Aptma, its own principal debtor, under an independent board framework proposed in meetings chaired by the Deputy Prime Minister in late 2025.

Scientists argue for a fourth option: reviving the PCCC as an independent, properly funded body. That requires collecting the rightly valued cess through the Federal Board of Revenue, filling long-vacant leadership and director posts, restarting recruitment, and building an accountability system tied to clear research targets.

Copyright Business Recorder, 2026