KARACHI: The cotton market witnessed a mixed trend. Trading activities showed improvement. The spot rate recorded a decline of Rs 200 per maund.
In the recent budget, the government has fulfilled the long-standing demand of APTMA by discontinuing the Export Facilitation Scheme (EFS) on imported cotton, yarn, and fabric. This move has provided a level playing field for the local industry to compete internationally, earning appreciation from industrial circles.
Recent rains in Sindh and Punjab have led to the partial closure of ginning factories, affecting production activities. However, experts suggest that while the rainfall will benefit the cotton crop, standing water in the fields could pose a risk of damage. Earlier, the crop had already suffered due to extreme heat, prompting farmers to remain vigilant about weather fluctuations.
On another front, discussions were held between the leadership of China and APTMA to promote bilateral trade. Both sides emphasized maximizing benefits from the Free Trade Agreement (FTA) to further strengthen trade relations between the two countries. Joint measures in this regard are currently under consideration.
Sohail Talat, Chairman of the Pakistan Business Forum (PBF) and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has demanded the revival of the cotton industry in South Punjab. He declared that the struggle to eliminate taxes on cotton would continue until the government meets their demands.
Ahsan-ul-Haq, Chairman of the Ginners Forum, stated that Pakistan’s agriculture sector, particularly cotton crops, is facing severe damage due to the inefficiencies of the Meteorological Department. He emphasized the need for better weather forecasting and policy interventions to protect farmers’ livelihoods.
The Pakistan Cotton Ginners Association (PCGA) had demanded the removal of taxes on Khal and Banola, but the government has yet to take action. This delay has caused significant unrest among cotton growers, who are already struggling with financial and operational challenges.
The local cotton market witnessed mixed trends in cotton prices over the past week. While prices in Sindh remained relatively weak, the Karachi Cotton Association’s Spot Rate Committee reduced the spot rate by PKR 200 per maund, closing it at PKR 16,300 per maund. The supply of phutti (seed cotton) increased in both Sindh and Punjab, leading to the resumption of operations in several ginning factories. However, due to the distribution of phutti among a larger number of factories, many are operating only partially. The recent rains in Sindh and Punjab have discouraged ginners from purchasing large quantities of phutti, which is expected to disrupt the arrival of phutti and affect cotton quality.
The government has discontinued the Export Facilitation Scheme (EFS) for cotton, yarn, and fabric in the budget and imposed an 18% sales tax on imported cotton, yarn, and fabric. This fulfills APTMA’s long-standing demand for a level playing field, which is expected to benefit cotton farmers and encourage textile mills to purchase local cotton, thereby boosting domestic trade. According to a report, the sales tax on imported cotton, yarn, and fabric—as well as local cotton—may be reduced from 18% to 10%. However, confirmation of this news will only be possible after the official notification is issued.
Meanwhile, the Pakistan Cotton Ginners Association (PCGA) remains concerned as its demand for the removal of taxes on cotton by-products, such as cottonseed oil and cake, has not been met. The Pakistan Kissan Ittehad has also raised its concerns and urged the government to address PCGA’s demands.
Sohail Talat, Chairman of the Pakistan Businesses Forum (PBF) and FPCCI, emphasized that the struggle to eliminate taxes on cotton will continue until the demands are met.
The rate of cotton in Sindh is in between Rs16,200 to Rs 16,500 per maund, while the rate of phutti is in between Rs 7,500 to Rs 8,200 per 40 kg.
In Punjab, cotton prices stood at Rs 16,700 to Rs 16,800 per maund. The rate of Phutti is in between Rs 7,800 to Rs 8,400 per 40 kg. However, prices of Banola have declined.
The Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by Rs 200 per maund, closing it at Rs 16,300 per maund.
Karachi Cotton Brokers Forum Chairman Naseem Usman said that international cotton prices showed a mixed trend, with New York cotton futures trading between 66.00 to 69.00 cents per pound.
According to the USDA’s weekly production and sales report, 27,300 bales were sold for the 2024-25 season. Pakistan remained the top buyer, purchasing 9,200 bales, followed by Vietnam with 7,700 bales, and Japan in third place with 2,500 bales.
For the 2025-26 season, sales reached 64,700 bales. Vietnam led with 34,300 bales, followed by El Salvador with 15,300 bales, and Malaysia in third place with 8,000 bales.
Chinese Consulate General and All Pakistan Textile Mills Association (APTMA) leadership have resolved to upsurge bilateral trade, take maximum advantage of Free Trade Agreement (FTA) and to explore possibilities of joint ventures in textile industry.
Zhao Shiren Consul General of China, Li Haoteng, Commercial Counsellor and Wang Yaqiang, Vice Consul visited APTMA office on Tuesday and discussed in detail prospects, ways and means to increase volume of trade and joint ventures in textile industry.
Dr Gohar Ejaz, Patron-in-Chief APTMA and Chairman APTMA Kamran Arshad welcomed the Chinese Consul General at APTMA. They were accompanied by Syed Ali Ahsan, former Chairman APTMA, Zonal Management Committee members including Haroon Ellahi, Muhammad Ali, Faisal Jawed, Ahsan Shahid, Ismail Fareed, Habib Anwar, leading textile exporters, Secretary General APTMA Shahid Sattar and Secretary General North Mohammad Raza Baqir.
Speaking on the occasion, Zhao Shiren said both China and Pakistan enjoy strong economic and cultural relations and China Pakistan Economic Corridor (CPEC) is an example of this robust relationship between both the countries. He highly appreciated the role of APTMA in general and of Dr Gohar Ejaz in particular in expansion of bilateral economic relations.
He enumerated highly plausible services rendered by Dr Gohar Ejaz in cementing relation between China and Pakistan not only as Commerce Minister but also in his private capacity.
He also spoke volume about community and welfare services being performed by Gohar Ejaz Foundation for poverty alleviation, medical services, educational and research uplift and industrialization of the country.
Consul General highlighted expansion of bilateral trade since the signing of China-Pakistan Free Trade Agreement (FTA) in 2006 and resolved to further uplift the said volume by taking maximum benefits from FTA.
He noted that balance of trade is presently in favour of China and assured of his help to not only expand trade volume but also to bridge the gap in balance of trade.
He informed that textile goods falling in more than 800 HS tariff lines of customs chapters 50 to 63 enjoy duty free status under FTA on import into China from Pakistan. He emphasised Pakistani textile industry to avail duty free regime widely liberalized for Pakistani textile products since implementation of Phase II of FTA in 2020.
According to reports, cotton has been cultivated on 3.128 million acres in Punjab and 1.005 million acres in Sindh. The expected yield per acre is estimated at 170 kg. Punjab is projected to produce 4.898 million bales, while Sindh is expected to yield 2.519 million bales. The total anticipated cotton production for both provinces stands at 7.417 million bales.
Copyright Business Recorder, 2025